The law of the jungle does apply. As a result, around 75 crypto asset exchanges went out of business during 2020.
At least 75 crypto asset exchanges have closed due to hacks, scams or simply disappeared for unknown reasons, during 2020.
According to the Crypto Wisser Exchange Graveyard, five exchanges were categorized as scams and four of them, Altsbit and Nerae, were marked as hacked.
A total of 31 were closed by the management company, while 34 were labeled as “MIA”, because they disappeared without explanation.
The Dutch exchanges NLexch and Chile Chilebit are the only two marked closed by their respective governments in 2020.
There are a number of macro trends that help explain why so many of the smaller exchanges fail.
The growth of DeFi and the rise of the decentralized stock exchange (DEX) in 2020 are considered to be big factors for the market going out of business.
The pressure from regulation by the government, has also increased since the early days of the industry and many exchanges have not been able to meet the requirements. Hacking and scams have also been cited as big problems for exchanges.
Two exchanges that are the center of attention are Bitmex and KuCoin. Bitmex was recently labeled illegal by the US Government, because it was considered negligent about licensing, including not applying KYC principles and anti-money laundering regulations.
Meanwhile, Kucoin was involved in a hacking problem worth trillions of rupiah in September 2020. Even though the losses were huge, Kucoin guaranteed to compensate for the user's funds.
Using the standard that today is similar to the Dot Com Bubble phenomenon in the era of the 1990s, the blockchain industry and crypto assets today in principle follow the cruel law of the jungle: the resilient will survive.