2019 turned out to be a tough year for the South Korean crypto exchange Prixbit, such that it was pushed to officially close down and terminate all of its crypto related services according to the announcement made by the website. Prixbit is not the only South Korean crypto exchange that faced difficulties, it is said that about 200 Korean exchanges are in danger of closing down, which consists of about whopping 97% of the space.
The news of shutdown entitled ‘Prixbitend’, was first revealed on the website on August 9, according to which the exchange’s platform was ceasing operations due to negative internal and external influences, management difficulties that could not be overcome and normal operation became impossible.
Very little information is available about Prixbit and it didn’t seem much active even while in existence. According to Foundico, which tracks ICOs, the beta was launched in February 2019. The formal opening was set for September, and the exchange was to issue 2 tokens,GRX and the PRX.
The platform has completely closed off its services and has begun the process of refunding to its clients as per its promise to return all deposits for people who had provided customer information to allow for return.
Reportedly, most of the refunds that involve exchange’s native tokens, PRX and GRX, have already been completed. Prixbit also addressed other tokens that were still on deposit in addition to its native tokens. The exchange has encouraged its users to register for a refund as soon as possible, in order to reclaim their tokens.
Prixbit revealed that it had done its best and worked hard in order to deal with the menace of hacking, money laundering and voice phishing. Menaces that the crypto ecosystem is unfortunately all too familiar with, however Prixbit failed to overcome these issues that lead to its untimely shutdown.
A report by BusinessKorea published on August 19, links the failure of the exchange with financial difficulties and to its investor’s concerns about losing their holdings in the exchange. While Prixbit is the latest exchange to bear the brunt of the aforementioned difficulties, it is in fact not the only exchange in the country to do so. The report also claimed hat an estimated 200 Korean exchanges are in danger of closing down, which makes up for about a whopping 97% of the sector.
Despite being a major market for crypto trading, a significant amount of crypto exchanges in South Korea are hanging be a scarlet thread as they struggle to continue their operations. As per the report, the bifurcation of the local market in the country has a lot to do with this crisis.
In the country, there are only four major digital asset exchanges in the country that can connect to local banks for fiat transactions, which are Upbit, Korbit, Bithumb and Coinone. The rest, on the other hand don’t have access to the banking ecosystem and hence they cannot offer fiat-based services to their customers. This also results in low trading volume in those exchanges, thus making it hard for them to sustain operations.
Which is why such a huge proportion of crypto exchanges in the country are on the brink of bankruptcy. And only 5-6 cryptocurrency exchanges from such a vibrant crypto market managed to make it to the 100 in the world.
And if that wasn’t a grim enough picture for the crypto exchanges in South Korea, multiple reports suggest that as result of the poor state of local crypto exchanges, several South Korean crypto startups are starting to put their confidence and money in the hands of oversees crypto exchange platforms. As per the report:
Foreign exchanges have opened the Korean won money market to attract South Korean cryptocurrency projects
There is no denying it, as there are multiple exchanges across the board trying to attract Korean startups, BW.com is amongst them. Already having listed the likes of Ziktalk, Storichain, Payexpress, and Sigma Chain, the platform intends on absorbing local crypto investors.
Another rather well established name in the crypto sector also has its eyes set on Korean crypto businesses. Binance Labs is reportedly luring Korean startups by directly accelerating Korean blockchain projects.
According to a report by Fn News, low trading volumes of the local exchanges, stricter domestic cryptocurrency exchange market conditions whereby investors cannot make or withdraw deposits in the Korean currency at Korean exchanges and the competition provided by oversees crypto exchange platforms, are the reasons behind downfall of local exchanges in the country.