Despite rising prices, crypto exchanges in Holland and Poland are closing


Crypto Winter is over. Bitcoin and altcoin prices and volumes are soaring. Unfortunately, several crypto exchanges are experiencing hard times. Blockport, an Amsterdam-based cryptocurrency exchange, has declared bankruptcy, while it contemplates a re-launch. Polish cryptocurrency exchange Coinroom appears to have taken a direr path. It ostensibly shut its doors and exited stage left with customer funds.

With all the favorable news of late regarding Bitcoin and other coin programs, it has been easy to forget that the consequences of Crypto Winter still have the capacity to take a toll on the industry. Many operating companies, from mining to exchange operations, have struggled to maintain positive cash flows and achieve their basic business objectives. For those that did not hedge early investment capital that was booked in either BTC or ETH, it has been a particularly tough row to hoe for some time.

In the case of Blockport, the firm successfully raised $15 million in January of 2018, following the ICO strategies of the time. For its second funding round, the exchange shifted gears and decided to go with an “STO”, a security token offering, where token buyers would share in profits and have access to private operating information. The goal for this second round was modest, €5 million with a minimum threshold of €1 million. Unfortunately, investors were not receptive, even passing on the minimum. Collected funds will be refunded.

Sebastiaan Lichter, Blockport Founder and Chief of Product, announced at the end of May: “Since our first equity fundraising (STO) round was unsuccessful, we can’t uphold our planned growth trajectory and therefore have to significantly scale down our operations and team.” Upon the news, the exchange’s proprietary token, “BPT”, tanked, losing 93% of its value in ten hours.

Lichter added that: “There are multiple internal and external factors that have played a role during our fundraise that had their effect on the overall sentiment and performance of the STO. Summing up, we think that it’s fair to say that the market has spoken, and we now have to deal with the undesired result. As a responsible but unfortunate measure, we have decided to drastically scale down our operations and development. Running our operations and platform as-is without a substantial investment is currently not an economically viable and responsible option.”

Blockport has declared bankruptcy, and while under the court’s protection, the management team is in discussion with other parties regarding a possible re-launch, after new “value-adding” features have been developed to attract more investors. In any event, all is not lost for token holders, if they are patient, and new plans are fruitful.

Such does not appear to be the case with Coinroom in Poland. This exchange had been in operation since 2016, but customers were suddenly told they had one day to withdraw their funds, supposedly a contract term within their trading agreements. The website and Twitter accounts were shut down, and management disappeared. Since only a portion of the customer base received even a partial refund, it is presumed that the management also grabbed the cash and ran for the nearest train or plane in the dark of night.

A spokesman for the District Prosecutor’s Office in Warsaw stated that it had begun legal actions against the firm. Few details were given, but it appears that local law enforcement authorities were questioning the nature of unauthorized exchange activities related to cryptocurrencies. The office was taking names of victim’s, many stating that average losses were in the neighborhood of $15,000 per client.

Read Also: