Hong Kong-based bitcoin exchange Gatecoin will be shutting down its operations and will enter into the settlement because of lack of failure to recover the funds it has lost in a fight with its former payment services provider.
The Bitcoin exchange incurred a loss of around 2 million dollars in 2016 and failed to recover it. Gatecoin is accusing a registered French payment service provider of disabling its functions. The French payment provider reportedly cheated the bitcoin exchange for non-transfer of an unspecific amount of money.
The company circulated the message on 14th March, to its customers by using their official company website. On the website, the project team described that few months after struggling to stay directionless and eventually, the order of the court to close the service and stop the operations immediately has led for discontinuation of the service.
The company in its public statement has accused the payment service provider (PSP) for the action of the court. From September 2018 onwards, there were issues taking place with the banking services when the bank accounts of the company where unexpectedly blocked in Hong Kong.
However, in the month of November 2018, Gatecoin mentioned that the company will be continuing its operations after it had recovered to a European payments processor, a complete payment institution controlled by French regulator and also a bank based in Switzerland.
In a statement posted on the website, Gatecoin stated, ”The Company has suffered huge financial problems over a certain period of time from now to a level that the company is not able to offer support to its operation.” The Gatecoin announced about its shutdown on March 14.
Gatecoin was established in 2013. The company was completely focusing on Bitcoin, Ethereum based token markets and Ethereum. However, in 2016 the Bitcoin exchange informed about the loss of investor funds of around 185,000 ETH and loss of 250 BTC to hackers, combining both resulted to a loss of 2.14 million dollars at that period. The funds were never retrieved, and hackers are not the reason for shutting down Gatecoin operations.
The bitcoin exchange completed the message by promising the customers that it considers of redistributing the remaining asset of the company to its investors.
So as to reduce the loss in September, Gatecoin had replaced the company, but that action was too late to be implemented. The condition of the company did not improve ever after that step because the former PSP had detained a huge amount of Gatecoin funds.
Gatecoin further added that “we were trying from months to recover the amount and even issued legal notice to the payment service provider but were instructed that it is very much difficult for Gatecoin to recover the funds from its former payment service provider in full.”
Bloomberg had announced in March, how industry startups are not able to open a standard checking account. The articles included stories of established cryptocurrency businesses and even drafted what could be the future issue.