The back-to-back announcements have drawn attention to the pressures facing parts of the crypto trading industry.
BitMart becomes the latest exchange to shut down
Crypto exchange BitMart said it will begin an orderly wind-down of its trading platform after “a careful evaluation of the company’s operating conditions, market environment, and future strategic direction.”
The exchange has stopped accepting new registrations, deposits and trading orders. Trading services will end on August 26, while the platform will officially cease operations on January 31, 2027.
The company did not disclose any specific financial or regulatory reason behind its decision.
Also read: Beyond Bitcoin: Why the next crypto race will be won by banks, not traders
BitMart has asked users to close open positions, complete Know Your Customer (KYC) requirements where necessary and withdraw their assets. It also cautioned that withdrawals may be subject to additional compliance checks, including identity verification, device and IP screening, source-of-funds reviews and sanctions checks.
BitMart has served global users for about nine years. The platform does not have a regulated presence in India.
BitMEX cites strategic review, faced years of regulatory scrutiny
Three days before BitMart’s announcement, crypto derivatives exchange BitMEX said it would shut down its operations from September 23 following what it described as “a strategic review of the business.”
The exchange urged customers to close open positions and withdraw funds before the shutdown, while stating that users’ assets remained safe.
While BitMEX attributed the decision to a strategic review, the exchange has faced years of regulatory scrutiny.
Its co-founders pleaded guilty in 2022 to failing to implement anti-money laundering and Know Your Customer programmes required under the US Bank Secrecy Act. They were later pardoned by US President Donald Trump. BitMEX was also ordered to pay civil penalties over compliance failures.
Founded in 2014, BitMEX pioneered perpetual crypto futures and once ranked among the world’s largest derivatives exchanges. However, regulatory action and years of litigation coincided with a decline in trading activity on the platform, according to CoinDesk.
Like BitMart, BitMEX is not a registered crypto exchange in India.
Industry slowdown is emerging as a common theme
While BitMart has not disclosed detailed reasons for its closure, analysts say the announcements come at a time when cryptocurrency trading activity has slowed sharply.
According to crypto research firm K33, July is on track to record the lowest average daily Bitcoin spot trading volume since November 2023, with activity across spot and derivatives markets remaining subdued.
CoinDesk reported that shrinking retail participation, weaker trading volumes and rising compliance costs are making it increasingly difficult for smaller exchanges to survive.
“There isn’t enough volume or retail trading anymore,” Jason Fernandes, co-founder of AdLunam, told CoinDesk.
“We are going to see a lot more of these closure announcements. I think the only exchanges that will survive are those not dependent on retail trading to be successful.”
CoinDesk also cited analysts as saying exchanges can no longer rely solely on retail-driven trading volumes and increasingly need institutional business, proof-of-reserves standards, broader product offerings and stronger regulatory compliance to remain competitive.
The report noted that new regulatory frameworks such as the European Union’s Markets in Crypto-Assets (MiCA) regime are increasing compliance costs, making it harder for smaller regional exchanges to operate.
Bitcoin has surrendered much of last year’s gains while crypto markets have been weighed down by subdued trading activity and ETF outflows.
Not every closure has the same trigger
The recent shutdowns are not all linked to market conditions.
Earlier this month, crypto wallet provider SecondFi announced it would wind down operations after attackers exploited a vulnerability in its transaction-signing software, stealing approximately $2.4 million worth of ADA from 374 wallets. The company said it would not resume normal operations despite patching the flaw.
Unlike the closures of BitMart and BitMEX, SecondFi’s closure followed a security breach rather than business- or market-related factors.
Although BitMart and BitMEX have cited different immediate reasons, analysts say the broader backdrop is becoming increasingly challenging for crypto exchanges.
Lower trading activity, weaker retail participation, higher regulatory compliance costs, and industry consolidation are putting pressure on smaller platforms, while larger global exchanges continue to absorb market share.
Also read: Bitcoin may be showing signs of a bottom despite continued consolidation, chart analysts say
