At the end of April 2019, the next victim of the declining Bitcoin markets was claimed, a major European cryptocurrency exchange based in Poland called Coinroom has reportedly closed its doors and ceased operation, leaving a number of investors out of pocket, with some claiming to have lost as much as $15,000.00 worth of cryptocurrency as a result of this closure. Let this remind you of some of the risks involved with storing your cryptocurrency within an exchange. If the exchange goes down (which seems to happen more and more often these days) your stored assets could go down with it, this is why cold, offline storage is often seen as a far safer alternative.
According to CoinTelegraph:
“Money.pl received an email from one of its readers, who stated that Coinroom — which was registered in 2016 — ceased operations overnight and disappeared with customers’ money in April. Some users say they had up to 60,000 zloty (around $15,790) in their accounts. Before ceasing its operations, Coinroom reportedly sent emails to its customers, containing information about contract terminations. Coiroom customers had only one day to withdraw their money, which was in accordance with Coinroom regulations signed by users. However, customers reportedly claim that some of them got only part of the money, while most of them did not receive their funds back at all.”
Until recently, this closure had gone unreported, further proving that cryptocurrency exchange closures are starting to become commonplace, is this something we are now desensitised too?
You might ask why exchanges are closing down in the first place. It’s quite a simple answer, when the markets are down and when values stoop low, people don’t invest in Bitcoin. If people stop investing, exchanges are no longer able to make money off transaction fees and therefore start to lose out. Until the markets pick up (for a long period of time) and until new investors jump on board, small cryptocurrency exchanges like Coinroom are at risk of becoming a victim of this.
For now, in order to ensure your assets remain safe, always store your cryptocurrency offline and away from exchanges. It might mean more work for yourself, but it also means that should the worst happen, you’ll still have access to and own your own cryptocurrencies.