Gatecoin Ordered To Liquidate its Assets

Gatecoin Ordered To Liquidate its Assets

Gatecoin has published a statement on its website informing its users that the exchange has received a winding up order from a certain court, which means it has been forced into a compulsory liquidation. The court has appointed Gatecoin a provisional liquidator and the exchange will cease operations instantenously immediately.

Hong Kong-based cryptocurrency exchange said it “suffered financial difficulty over a period of time to an extent that we are no longer able to support our operation.” But “difficulty” is quite an understatement for the time Gatecoin has had since its May 2016 hack.

During Gatecoin’s hack, the attackers were able to alter the exchange’s system so that Ether (ETH) and bitcoin (BTC) deposits were sent directly to hot wallets, rather than the usual multi-signature cold wallets. The attackers were able to take 185,000 ETH and 250 BTC, which at the time accounted for 15 percent of Gatecoin’s total crypto assets. The exchange was able to raise $500,000 in July 2016, which Gatecoin’s CEO, Aurélien Menant, said was used to upgrade its security team – the exchange fired its chief technology officer after the hack –and reimburse affected users.

Later, in September 2017, the exchange experienced a hard-to-believe series of bank account freezings. On September 15, Hang Seng Bank froze Gatecoin’s accounts “without any notice,” meaning Hong Kong dollar (HKD) and USD transfers on the exchange were put on hold. On the same day, in order to reopen HKD and USD transfers, Gatecoin activated its accounts held with Alpen Baruch.

Eventually, Gatecoin brought on a new PSP that ended up retaining a large portion of the exchange’s funds, and after “months spent trying to recover those funds,” the exchange was advised it would probably be unable to recover its resources in full.

Although Gatecoin was appointed a provisional liquidator, the exchange states that it will assist in the liquidation process “in order to expedite the realization and redistribution of our assets to the creditors.”