In a surprise move, one of the oldest crypto exchanges in Spain named 2gether, blocked its operations, which left its users without access to their accounts on the platform. The platform sent its customers an email in which it said that the current conditions of the crypto market had driven the exchange to take this step. Furthermore, the exchange went as far as removing its presence from social media, as its Twitter account could no longer be found.
Bear market woes
The cryptocurrency market is facing the worst downturn in its history, which has taken a toll on a number of entities operating in the crypto market, including exchanges and lenders. These entities have either filed for bankruptcy, are unable to return their clients’ funds, or are looking for additional funding in order to support their operations. 2gether is the latest exchange to become a victim of the crypto bear market.
Recognized as one of the oldest Spanish crypto exchanges, the platform blocked its clients from accessing their accounts. Customers were informed of the situation through an email in which it said that current market conditions prevented the exchange from serving its customers.
The exchange’s viewpoint
According to 2gether, it had served the crypto community in Spain for five years and they were now forced to shut down its service for private accounts. It said that the crypto winter combined with lack of resources had driven them to take this step, as they could not provide their services with the same guarantees and quality as that of other providers.
This is the first Spanish exchange to have been affected in this manner because of the current climate of the crypto industry.
Accounts held hostage
It should be noted that 2gether has not permitted its customers to with their money to self-custody wallets or other exchanges. In fact, the company has informed its customers that if they want to keep their accounts active on the platform, they would have to provide the exchange with €20, so it can continue operating.
If these funds are not available in accounts by July 10th, they would be suspended. Plus, the cryptocurrencies in the said accounts would be liquidated. The Financial Users Association of Spain (Asufin) said that about 100,000 customers have been affected because of this action of 2gether, as they had relied on the exchange for conducting crypto transactions and protecting their funds.
The organization plans on launching legal action against the exchange on behalf of its customers. As a matter of fact, regulators could use this situation as leverage for pressing the issue of developing crypto regulations in the country as well as regulating actions of the virtual asset service providers (VASPs).
The Bank of Spain’s governor, Pablo Hernandez de Coz said back in May that it is a must to establish crypto regulations because this can help them in avoiding the risk of financial instability. Other countries are also looking to take similar initiatives, considering the issues that have become apparent in the crypto space.