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After failing to overcome “rapidly evolving” crypto-related challenges, Bitfront is shutting down its crypto operations on March 31st.
Crypto exchange Bitfront is shutting down its digital currency operations in a few months amid the ongoing crypto winter. According to the US-based Line Corp-backed company, it has suspended credit card payments and new sign-ups. Bitfront issued a statement addressing its intended closure, which read:
“Despite our efforts to overcome the challenges in this rapidly-evolving industry, we have regretfully determined that we need to shut down Bitfront in order to continue growing the LINE blockchain ecosystem and LINK token economy.”
However, despite the Bitfront shutdown, Japanese messaging giant Line will continue to support its blockchain ecosystem and native token.
Bitfront Shutting Down One Month after FTX Bankruptcy
The Bitfront closure comes just over a month after the FTX collapse that reverberated across the crypto industry. Although Bitfront admitted failure to weather the prevalent crypto contagion successfully, the company denies shutting down due to “misconduct”. This stance could be an allusion to FTX’s implosion, which put the Bahamian-based exchange in the investigative crosshairs of regulatory authorities. As it stands, the governments of the United States and the Bahamas are probing FTX for alleged criminal misconduct and misappropriation of customers’ funds.
Bitfront described its decision to close shop as being in “the best interest of the LINE blockchain ecosystem”. The troubled company also stated that users can withdraw their crypto assets until March 31st, 2023. In addition, Bitfront clarified that it would pay out interest for deposits made between December 5th and December 11th, on December 13th. By the end of December, Bitfront also aims to halt all crypto and fiat deposits, suspend trading, and discontinue open orders.
Bitfront reaffirmed its commitment to safeguarding user assets and intends to abide by this even after operations cease. The exchange explained that it plans to delete most of its users’ personal information within 40 days after March 31st next year. However, Bitfront disclosed that it might need to retain some data for compliance and regulatory obligations.
Crypto Industry in Tailspin
Bitfront is just one of several digital currency players to temporarily or permanently discontinue operations. However, the FTX crash caused numerous smaller players to halt services following the crypto liquidity crunch. Another example of a crypto business that has fallen is the lender BlockFi. Like FTX, the popular crypto lender filed for Chapter 11 bankruptcy protection in the United States on Monday. The bankruptcy filing revealed that VC fund Valar Ventures has a 19% ownership stake in BlockFi. Speaking on the BlockFi development, Valar Ventures financial advisor Mark Renzi noted:
“From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and all other stakeholders.”
According to BlockFi, it has roughly $257 million in cash on hand to navigate the bankruptcy proceedings. In addition, the fallen company’s bankruptcy filings disclose that it has over 100,000 creditors and $10 billion in assets and liabilities.