Bitspark, a cryptocurrency exchange based out of Hong Kong, would cease operations in the coming weeks.
According to an official press release, the company chief executive and co-founder George Harrap announced that the firm would be shutting down, advising users to move their funds to other exchange platforms on or before March 4, 2020. After the deadline, the company would restrict login access for a period of 90 days, although users will still be able to request their funds from the company’s support page.
Company Turmoil and the Coronavirus
In the release, Harrap explained that the abrupt closure was an unfortunate turn of events for the exchange, especially as it had started to report impressive financial figures for the past few months. As he pointed out, the exchange introduced Cash Point- a remittance service- back in 2019, and between that period, they had recorded a 400 percent growth in volumes month-over-month.
The document also highlighted the exit of Maxine Ryan, its co-founder and erstwhile Chief Operations Officer (COO). Ryan stepped down from her role as COO back in December 2019, and according to a Twitter thread she made in response to the exchange’s closure announcement yesterday, her exit caused a need for the firm to restructure its operations. Sadly, this move wasn’t conducted effectively, and that led to the eventual closure.
Ryan also pointed out that the closure was due in part to the outbreak of the coronavirus- an epidemic that started in the Wuhan region and which is ravaging China and the world. In China, the virus has claimed the lives of over 420 people, with another estimated 12,000 affected (all figures accurate at press time).
“This paired with the landscape of Hong Kong with protests and the coronavirus where Bitspark HQ is located. The team and shareholders decided this was the best way forward to prevent the integrity decay of the company,” Ryan clarified.
AML Change Causes More Exchange Shutdowns
Bitspark is undoubtedly not the only exchange to be shutting down in the past few months. However, while its demise as a result of both human and natural causes, most others have had to close their doors due to an imminent change coming to the global crypto landscape.
Over the past two months, numerous exchanges have had to close shop due to the imminent implementation of the Fifth Anti-Money Laundering Directive (AMLD5), an AML regulation that is set to affect all cryptocurrency asset custodians- especially exchanges- across the European Union.
The upcoming policy will force asset custodians and crypto firms to adopt Know Your Customer (KYC) measures, collecting information on their users and the source of funds used in transactions. While several countries have fought the implementation of these laws, others have been welcoming, leading to crypto firms to shut down.