DX.Exchange 'Temporarily Closed' Amid Talks With Asian Investors
DX.Exchange, an Estonia-based crypto exchange, known for its plans to offer digital tokens based on shares of Nasdaq-listed companies, is now in merger or sale talks with undisclosed Japanese and Chinese investors, a source close to the situation told Cryptonews.com.
The exchange, which is owned and operated by Coins Marketplace Technologies OÜ, expects to close the deal later this month, the source added.
On Sunday, the company announced that their board of directors has decided to temporarily close the exchange down as they "pursue a merger or outright sell of the company." They explained that "the costs of providing the required level of security, support and technology is not economically feasible on our own."
Starting with November 3rd, the trading has been suspended and no more deposits are allowed, while all open orders were also cancelled. All client funds are safe, the exchange states, and need to be returned in order for a merger/sale to proceed. All withdrawal requests must be submitted by November 15th, or the withdrawal process could be disrupted, DX.Exchange said.
While the announcement stated that this is only temporary and that the users will be notified when trading and deposits will open again after the merger/sale, it did also say that if the deal "is not completed in a timely matter then the exchange may not resume operations and take appropriate action." All this comes after the exchange has been discussing additional plans for their native exchange token DXCASH in early October.
As reported in January, the exchange aimed to offer digital tokens based on share of 10 Nasdaq-listed companies, where each token would backed by a share and holders and would be entitled to the same cash dividends, even though the companies themselves aren’t involved. The company planned that the actual shares will be bought and held by partner MPS MarketPlace Securities Ltd, a global, multi-asset broker dealer, whereas the tokens will be based on the Ethereum network, with the amount corresponding to demand on the exchange. However, at pixel time, the website of the exchange does not provide information about such trading. Also, in March, the company said it started listing security tokens.
DX.Exchange did not respond to our request for comment.
The reaction to this news in the Cryptoverse has been swift. While some were not particularly surprised it seems to see another exchange go down, quite a few people were concerned that this means that users will not be getting their money back, wondering why people weren't notified sooner so that they could transfer their funds before this announcement with a deadline has been made. Some people pointed to this development as a good reason to keep one's money in an offline wallet, such as Ledger or Trezor.
Besides the supporters who were disappointed by and who disagree with this action and urge the exchange not to close down, there are those who find the exchange and their latest announcement to be a scam.