Nasdaq-listed Eqonex closes crypto exchange due to low volume, ‘intense competition’

Listed blockchain Services company Eqonex Limited (EQOS) announced on Monday that it will shut down its cryptocurrency exchange operations, citing declining trading volumes, “intense market competition and low margins.”

The stock exchange closes on 22 August. It gives customers one week to close their derivatives trading positions, after which all trading on the platform will cease. The exchange’s customers will also have until 08:00 UST on September 14 to withdraw crypto assets to an external wallet. All withdrawal fees will be waived during this time, the company said.

Meanwhile, the exchange’s original EQO token, which cannot be withdrawn, has immediately ceased trading. Holders will be contacted directly with details of their EQO balance.

“Closing the exchange will significantly simplify our business, narrow our focus, free up resources and allow us to operate as a more efficient organization with the capacity to aggressively pursue market segments that offer the most potential,” Eqonex CEO Jonathan Farnell said in a press release. statement. Farnell previously served as Binance’s head of UK operations before moving to Eqonex in March.

Nasdaq-listed Eqonex launched its crypto exchange in July 2020 during a period of rapid growth in crypto markets that culminated in new all-time highs for Bitcoin and Ethereum just six months later. In October, it became the first crypto exchange to have a parent company listed on Nasdaq. The company celebrated reaching $5 billion in trading volume within a 30-day period in June 2021, and proposed at the time that it “just up” from there for the change.

But that was then and this is now, with crypto markets entrenched in a months-long bear market. The company now plans to redirect resources towards its custody and asset management business, Digivault. The asset manager became the first crypto custody provider to receive approval from the UK’s Financial Conduct Authority in 2021, according to the company.

Eqonex hopes that by closing its crypto exchange it will become more competitive in other areas of its business. “The market now consists of close to 300 spot exchanges, many of which share comparable characteristics,” the company said. “The recent extreme market volatility and declining trading volumes have contributed to the headwinds being felt by exchange operators. We have a realistic view that our exchange will not move the needle for us financially in the near to medium term.”

Even the most competitive crypto exchanges have struggled in the face of falling volumes and crypto prices in recent months. Blockchain.com announced a 25% workforce layoff in July citing flat institutional income. Coinbase let go of 18% of its staff last month, after which it posted a net loss of $1 billion in its Q2 earnings report.