DX Exchange, which had made headlines in the crypto sphere in January at the time of its launch, has announced that it is temporarily closing down. The exchange has delineated an elaborate KYC process for users to withdraw their funds from the exchange. The crypt community is calling the move an “exit scam”.
DX Exchange, in a blog post published on November 3, announced that the Board of Directors had decided to temporarily close the exchange as the exchange sought a merger or an acquisition. The reason they cited for closing the exchange was economic infeasibility.
“The costs of providing the required level of security, support and technology is not economically feasible on our own,” the blog post said.
Furthermore, the exchange may not resume its operations at all and “take appropriate action” in case the merger or acquisition is not achieved in time.
The exchange has already suspended deposits and trading. It also commented that the users’ funds are safe.
ALL client FUNDS are SAFE and need to be returned to allow a merger/sale to proceed.
Users, who wish to withdraw funds from the exchange will have to fulfil an elaborate KYC procedure. It includes submitting a list of documents to the exchange. The documents include a copy of the front page of the same government ID that the users had used to open their accounts, the wallet address of each cryptocurrency that the users want to withdraw, the amount of each withdrawal per cryptocurrency pair, a selfie of the users holding a paper with the date November 3 and the words DX Exchange.
The users have to use the same email id for submitting the documents that they used for registering on the exchange. The users have time till the 15th of November to submit the withdrawal request.
DX Exchange, which has launched in January this year, had created a lot of buzz in the crypto-sphere because of its unique offerings. Back then, the Estonia-based exchange had announced that it was going to offer crypto tokens representing the shares of several tech firms listed on NASDAQ. Also, the exchange was going to utilise Nasdaq’s matching engine to enable the trading of digital securities and prevent market manipulation.
However, the exchange is closing down within less than a year of its start. The crypto community is labelling the exchange as an exit scam.
A crypto influencer who goes by the name of SalsaTekila (JUL) takes a dig at the way the exchange has asked users to prove their identities.
DeFi Dude on Twitter says that the KYC is the exchange’s way of stealing money.
Another user with the handle @BTC_Obsessions has retweeted his posts from January in which he had raised several concerns around the exchange. The exchange had already begun to look suspicious back then with its 88000 followers on Telegram, whereas Binance, an established exchange, had less than 86000 followers on Telegram. With screenshots of a Telegram chat, the user had pointed out that the exchange had not been able to answer in which jurisdictions was it available. Others users on the thread also shared that they were unable to withdraw their BTC from the exchange.
The concerns pointed out by the crypto community are bound to raise suspicions around the intentions of the exchange. Do you think that the exchange’s demand for users’ indentification is rational? Or is it an attempt at scamming them? Share your views in the comments below!
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