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Hong Kong crypto exchange Gatecoin winds down operation

Hong Kong bitcoin exchange Gatecoin implements express onboarding

Gatecoin, a Hong Kong-based bitcoin and cryptocurrency exchange, announced yesterday that it has shut down operations.

In a message left to users on gatecoin.com the team wrote “On 13 March 2019, the court has granted a winding-up order against our company. A provisional liquidator has been appointed and we have to cease operation with immediate effect. Please rest assured that we will assist the liquidation process in order to expedite the realization and redistribution of our assets to the creditors.”

In May 2016, Coingate experienced a hack and theft of ETH and BTC (roughly $2m worth) and with the subsequent rise in prices following this event, it became harder and harder to repay the funds. In the notice left to users, the company also cited financial difficulties with their payment service provider.

The message in full from Gatecoin on the shut down can be read below:

Dear users,

As you may know, following our issues with our banking partners in September last year, we started working with a Payment Service Provider (“PSP”) which is a fully regulated payment institution by the French regulator. However, that PSP failed to process most of the transfers in a timely manner which in turn almost paralyzed our operation for many months and caused a substantial loss on our side.

Even after we managed to mitigate our loss by replacing that PSP with more reliable alternatives to process our clients’ transfers in September 2018, the situation did not improve because that PSP retained a large part of our funds. After months spent trying to recover those funds, we commenced legal action against that PSP but were advised that it is unlikely that we would be able to recover the funds from them in full.

In light of the circumstances, we have suffered financial difficulty over a period of time to the extent that we are no longer able to support our operation. On 13 March 2019, the court has granted a winding-up order against our company. A provisional liquidator has been appointed and we have to cease operation with immediate effect. Please rest assured that we will assist the liquidation process in order to expedite the realization and redistribution of our assets to the creditors.

Once again, we thank you for your support over the years and apologize for the inconvenience that may cause.

Sincerely,

The Gatecoin Team

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