Image source: Eqonex
On Monday, another publicly traded blockchain announced it would be shutting down operations due to trading volume going down.
Eqonex Limited or EQOS recently announced it is shutting down its cryptocurrency exchange operations.
The company’s decision is boiled down to factors like trading volume, the increased market competition, and low margins.
Eqonex will close its doors on August 22.
With the exchange closing next week, customers are given one week to close their derivatives trading position before trading on the platform ceases.
Customers will also be given until 8:00 am UST on September 14 to transfer their crypto assets to an external wallet.
Eqonex also said withdrawal fees will be waived during the period.
When the announcement was made, the native EQO token (which can’t be withdrawn) immediately ceased trading.
Holders of the token will be contacted directly regarding their EQO balances.
Eqonex CEO Jonathan Farnell previously served as Binance’s head of UK operations before he transitioned to Eqonex in March.
Farnell released a statement that reads:
“Closing the Exchange will significantly simply our business, narrow our focus, free up resources, and allow us to operate as a more efficient organization with capacity to aggressively go after market segments that offer the most potential.”
Birth of the company
Eqonex is Nasdaq-listed and launched its crypto exchange in the first year of the pandemic (July 2020).
The launch coincided with the period of rapid growth in crypto markets, which saw Bitcoin and Ethereum reach new heights six months later.
By October, Eqonex became the first crypto exchange with a parent company listed on the Nasdaq.
A year later, the company celebrated achieving $5 billion of trading volume within a 30-day period in June 2021.
The success prompted them to suggest at the time that it was “only up” from there for the company.
The current situation
Since then, things have changed, and crypto markets are entrenched in a months-long bear market.
Eqonex plans to direct resources towards Digivault, the company’s custody and asset management business.
According to the company, the asset manager was the first crypto custody provider to receive the United Kingdom’s Financial Conduct Authority’s approval last year.
With the crypto exchange closing, Eqonex hopes it can become more competitive in other areas of its business.
“The market is now comprised of close to 300 spot exchanges, many of which share comparable features,” said the company.
“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators.”
“We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”
Eqonex isn’t alone as other crypto exchanges have struggled with declining volumes and crypto prices recently.
Nasdaq-listed Eqonex shuts down crypto exchange due to low volume, ‘intense competition’