Staggering Amount of Cryptocurrency Exchanges Have Closed Down

Staggering Amount of Cryptocurrency Exchanges Have Closed Down

Good day everybody,

Welcome to CryptoGod-1's blog on all things crypto. Recently I saw a post of the Cryptocurrency group on Reddit which caught my attention. The post outlines how 368 exchanges have shut down since 2014! Its a staggering amount, which in many ways highlights the issues and mistrust people have for cryptocurrency exchanges. Today I will delve into this article and give my perspective on the exchanges and figures. I will paste a link to the original post of Reddit here: CryptoCurrency Post



Original Post Breeakdown

First of all, its important to note this was not my post, just one I found while scrolling through the Reddit group. All the data and information was collected from which provides a breakdown of now defunct exchanges, known as the 'Exchange Graveyard.'

From the analysis did by the original poster, u/reddito321, roughly 44% of the exchanges which have shut down just plain disappeared between 2014 and 2023. That's 161 out of the 368 exchanges which shut down, the others generally giving reasons such as being hacked, rebranding, or for regulatory reasons.

In the image below I created with you can see exactly how this works out for each category.



The post goes on to show how 2021 was the worst year for exchanges shutting down, which according to the data led to 100 exchanges closing in that year alone. It was closely followed by 2020 which saw 97 ceasing function, and in 2019 a total of 81 exchanges closed or vanished. In the year2022 we saw a drop in the amount shutting with just 55, although that could be contributed to the fact that Crypto had entered a bear market. It is also interesting to note how only 1 exchange closed in 2014, possibly the most famous (prior to FTX anyway) in Mt. Gox, and only in 2017 did another 1 close after that. From 2018 onwards the numbers began to spike, but of course a lot of this can be associated to the lack mainstream popularity with crypto, along with a lack of exchanges existing.

In the image below I created with you can see exactly how this works out for every year since 2014.



Finally, in the original post it notes how the worst day so far for Crypto Exchange closures was the 11th of January 2022, with a total of 16 different exchanges closing. The below image from the Exchange Graveyard shows the exchanges which closed and the reasons why, with 11 of them noted as MIA (Just Disappeared), 3 as Business Reasons, 1 being Rebranded, and another 1 being a Scam.




My Take on the Data

When looking at the data it is somewhat fascinating the see that the industry which is often labelled as dangerous, a scam, and in general risky, had a total of 29 exchanges shutting down due to being a scam. Only 29, which out of 368 exchanges shutting down, is just under 8%. Minimal in the grand scheme of things.

The next biggest risk people associate with crypto and exchanges are the potential for hacks, which according to the data only came in at 15 total hacks, or just over 4% of the total exchanges which closed. Another minimal figure, although it is important to note some may have rebranded, or not shut down following a hack.

This is where the data gets complicated. The categories do not define what reasons an exchange may have rebranded and may lead to some conflicts of interest. Another important factor is the amount of exchanges which are considered MIA. Missing in Action. Just Disappeared. 161 exchanges in total are considered to be a part of this category, which which broken down gives just under 44% of the total amount of exchanges which have shut. 44% !!!! Add the scams and hacks to this figure and suddenly we get a much clearer picture of why Crypto and Crypto Exchanges have such a risky reputation.

Scam (7.9%) + Hack (4.1%) + Vanished (43.8%) = Total of 55.8%

More than half of all the exchanges which have closed down were due to bad actors. Some are more famous than other, such as Mt. Gox and FTX, but the sheer amount which have been due to exploits and owners misleading consumers is alarming. Some of the other categories could lead to believing there were bad actors at play in those exchanges also, with 'Business Reasons' and 'Rebranding' being somewhat ambiguous terms. The only real reliable section, in my opinion, is the Regulatory Reasons category as it clearly defines there was intervention from regulatory authorities which led to the closure of the exchange.

Its also very interesting to note how the exchanges grew in popularity over the years, as of course in the early days of crypto the function and amount of exchanges were quite limited. In 2023 there is a plethora of exchanges, but back in 2014 Mt. Gox was one of the go to places. The gap between its Hack and the Regulatory Reasons for the closure of CHBTC in 2017, over three and a half years later, shows how limited the amount of corruption there was in the space. Or possibly the amount of people available to defraud.


In 2023 crypto has seen mainstream booms and busts, with so many players entering the space and even apparently 'safe' exchanges like FTX turning out to be bad actors. There is limited trust in the space and it shall continue likely until regulation takes hold of the space. Limited regulation to condemn the bad actors is what's required. Regulation which ensures there are consequences for people committing fraud and scams, while also regulation to close of the alarming loophole of exchanges disappearing. Whether this is done via an international register (would require cooperation globally) or through each nation governing their own exchanges similar to how they govern their own financial markets remains to be soon. For now, its important to remember the most important phrase in crypto, 'Not Your Keys, Not Your Crypto.' The data does not lie, many many exchanges have exploited their users over the years and there is still the potential for many more to follow suit. Keep your coins safe out there.


Have a great day.

Peace. CryptoGod-1.


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CryptoGod-1 : Crypto & Blockchain
CryptoGod-1 : Crypto & Blockchain

Enthusiast here looking to share my ideas, thoughts, analysis, and experience when it comes to all things crypto

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