Gatecoin, which is a crypto exchange that was hacked in May 2016, is in the cryptocurrency news today for announcing that it has received a winding up (known as compulsory liquidation) order from an unspecified court. The Hong Kong exchange had suffered a major hack in May 2016, when it lost more than $2 million in cryptocurrencies such as Bitcoin and other altcoins.
A security breach was the main reason for this hack, giving access to hackers. According to the latest news, the company wrote that Gatecoin will now have to cease operation with immediate effect, noting that the company will also assist in the liquidation process in order to distribute the assets to its creditors.
As some statements right now show, hackers stole more than 250 Bitcoin (BTC) and more than 185,000 Ethereum (ETH) tokens, which sum up to about 15% of Gatecoin’s total crypto assets. Right now, such an amount of BTC and ETH is worth around $25.5 million according to data from CoinMarketCap.
What’s recent from Gatecoin is an announcement in which the exchange elaborated that they originally started working with a Payment Service Provider (PSP) following the issues with its banking partners in September 2018. In the post, Gatecoin seems to be blaming the PSP for the liquidation process and claiming that it failed to process most of the transfers in a timely manner. This, according to the exchange, “almost paralyzed our operation for many months and caused substantial loss.”
“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,” the exchange explained in a post.
The company tried to recover the funds by initiating legal action against the PSP – but was then advised that it was unlikely to recover them fully. This caused financial difficulties which made Gatecoin no longer able to support the trading operations.
Originally founded in 2013, Gatecoin became the first trading platform to list the Ethereum token in 2015, two years before it got closed.
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