Cryptocurrency

Gatecoin Could not Survive the $2 Million Hack, it’s Finally Dead

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Launched in 2013, Gatecoin was established in Hong Kong and started off with a bang until the 2016 multi-million hack that stripped it off over $2 million. It’s failed attempts to stay afloat finally ended today as the company decided to shut shops, declaring themselves ‘dead’.

According to reports, the company is going into liquidation after it lost the humongous amount, which belonged to its customers. It must be mentioned here that it was one of the earliest digital assets exchanges in the world. It was focused on Bitcoin, Ethereum, and Ethereum-based token markets.

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A statement issued by Gatecoin said that the shutdown was the result of troubles caused by payment services that brought the company’s operations to a standstill. In fact, this caused the company a “substantial loss” from where it could not recover. The pain points continue to build up ever since, In 2017, for instance, their bank accounts were frozen for some unknown reason.

The statement further said how the court had issued a “wind-up” order to them and asked them to cease operations immediately. The statement further narrated how it is going to realize the redistribution of the assets among the creditors. It is believed that the combination of cryptocurrency was worth over $2 million. However, Ethereum alone was valued in excess of $203 million. Things looked up in January last year when Gatecoin started processing over $17 million, But that did not last long as the revenues started dipping sharply. The hack three years ago saw a loss of 185,000 Ethereum worth $24.2 million and 250 bitcoin worth $960K from the start-up’s hot wallets.

While the above is one side of the story, Gatecoin has another story to narrate which says that that the liquidation happened because of a third party payment service provider, which failed to process most of the payments in a timely manner. Further explaining their dilemma, they said that although they had replaced the PSP, a majority of the funds were held by them. Gatecoin also claimed to have pulled all the strings to recover all the money from the PSP but were informed that the recovery wouldn’t be full.

The legacy of Gatecoin rather ended unceremoniously with the legal forces being dragged into it. Customers too, who are yet to recover the invested amount, have a long-haul battle to fight; winning it is a different proposition altogether. The faith on Cryptocurrency has dwindled ever since customers have come to terms with the dark side of digital currency.

Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.

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