A leading Crypto service comparison website, cryptowisser announces the launch of its annual Crypto exchange graveyard for 2022. This list is the only comprehensive database of “dead” cryptocurrency exchanges currently available.
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In 2022, 51 exchanges were reported dead, with the vast majority seemingly dying out due to business reasons and there were small percentages of scams, rebranding and regulatory deaths.
Out of all the exchange casualties of 2022, FTX received the most attention, namely due to its sheer size and perceived strength (previously the third-largest exchange by trading volume). Unlike most crypto exchange deaths, this incident shook the crypto community to its core, whereas the majority of crypto exchange deaths occur in smaller, lesser known exchanges.
In the course of the crypto winter, fewer and fewer new crypto platforms were able to start up shop, resulting in only the strongest crypto platforms living to tell the tale. Less than 3% of crypto exchange deaths were caused by hacking or scams, the most notable being the Hoo exchange, which was reported to have frozen withdrawals, before disappearing, leaving an angry alliance of former Hoo traders behind. Cryptowisser also saw a significant decrease in the number of new exchanges registered.
Although the market has declined, household names have held onto their market shares, making it difficult for smaller exchanges to establish themselves. The FTX debacle drew even more attention to trust issues in the crypto market, making people less likely to choose a lesser known exchange. Not only that, large exchanges such as Bitget have begun to advertise their “protection funds” to reassure traders that their funds are safe with them.
Over 50% of the exchange deaths in 2022 were reported “M.I.A”. Just disappeared into the ether, occasionally leaving clues of their death in a trail of confusing tweets, trading volume crashes, homepage 404s and dodgy site redirections. A clear indication of the crypto winter weeding out the weak, but unsettling nonetheless for affected traders.
In the centralized exchange world, FTX demonstrated how quickly things can change. Within the following weeks, traders began withdrawing large amounts of BTC from exchanges and placing them in cold storage. Additionally, there are a number of new investors attracted to decentralized cryptocurrency exchanges because they are able to maintain greater control over their funds.
Although the deaths of exchanges were lower than previous years, FTX has had more of an impact on the market than the hundreds of dead exchanges in the previous years. The bigger exchanges like Binance continue to cement their market share. Until the market recovers, exchanges will continue to die, especially if they cannot rebuild trust with their traders.