Renowned cryptocurrency exchange named ‘Gatecoin’ that was hacked earlier in May 2016, has recently ‘revealed‘ that it has received a compulsory liquidation [termination order] order from an anonymous court.
The firm wrote that Gatecoin will be ceasing its operations with immediate effect, noting that the exchange can assist within the liquidation process so as to distribute assets to the creditors.
The Hong Kong-based cryptocurrency exchange had ‘suffered‘ a significant hack back in earlier May 2016, with around $2 Mln in cryptocurrencies lost after the firm announced a security breach that gave hackers access to Gatecoin’s crypto wallets.
In line with the teams ‘statement‘ at the time of ‘hack‘, hackers hacked 250 Bitcoin’s [BTC] and 185,000 Ethereum [ETH], that represented around 15% of Gatecoin’s total cryptocurrency assets. At the reporting time, the total summed hacked accounts to around $25.5 Mln, in line with information cited from ‘CoinMarketCap‘.
In the recent announcement, Gatecoin added that the firm started operating with a PSP [Payment Service Provider] following problems with its banking partners earlier in Sept. last year. Within the post, Gatecoin seemed to blame the PSP for the liquidation process, claiming that it failed to process most of the transfers in a timely manner, that “almost halted our operation for several months and caused substantial loss.”
Explaining further, Gatecoin added:
“Even after we managed to mitigate our loss by replacing that PSP with a lot more reliable alternatives to process our clients’ transfers in Sept. last year, the case however failed to improve as PSP retained a larger part of our funds.”
The firm explained that it tried to recover its funds by initiating legal preceding against the PSP, but was suggested that it had been unlikely to recover the funds totally, that caused monetary difficulties and hence made Gatecoin no longer able to support its operations.
As reported earlier, Gatecoin was conjointly facing several banking problems since 2017, with some banks ‘reportedly‘ closing the accounts of the exchange without any detailed clarification.
Earlier in 2015, Gatecoin also launched segregated client bank accounts, enabling 2 accounts within the same bank underneath Gatecoin’s name: one account was for the collection of fees and operation expenses, whereas the other was used for storing client deposits, along with processing their withdrawals.
On the other hand, another recently ‘hacked‘ Cryptopia exchange, has partially ‘relaunched‘ its web-site, announcing that it’ll be using customers’ balances held from the date of the ‘hack‘ as a basis for calculating further rebates.