As the price of cryptocurrencies plunges and regulators are stepping up investigations into the murky sector, new figures show that over 300 UK-based blockchain startups were dissolved or liquidated in 2018.
According to a recent Sky News report, despite a few companies that successfully made it on the crypto market, others weren’t that lucky. At least 340 crypto-linked companies reported they were shutting down this year, compared to 139 in 2017.
Furthermore, 60 percent of those businesses involved in the new breed of digital currencies ceased operations between June and November, when cryptocurrency market has lost more than 80 percent of its overall value.
More than 200 of these crypto firms were incorporated with Companies House during 2017 when Bitcoin peaked past $20,00 in December and then sparked several regulatory agencies to get involved.
The report further states that many UK investors lost their funds as they were attracted by the concept of wresting control of money from the traditional banks. Others thought it was an opportunity too good to miss.
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FCA Cracks down on Crypto Business
“Married men accessed equity through their family homes, and often – whether because they felt they needed to act quickly to make the most money, or because they feared that their investment would be criticised by their spouses – did so without informing their families, only to see the value of their assets evaporate, followed by their homes,” Sky News reporter says.
2018 has proven to be a rough year for crypto. Not only have prices continued to crash over the last 11 months, but the world’s watchdogs are cracking down on business operations every chance they get.
Echoing the recent sentiments of other major financial regulators, the UK’s FCA recently confirmed that it had investigated roughly 50 crypto firms, up from only 24 in May.
The City watchdog is also considering a ban on retail derivatives of cryptocurrencies, including CFDs, futures and options, as part of the UK authorities’ sweeping push to regulate the virtual asset class.
The proposed prohibition was suggested by the recently-established UK government’s crypto assets taskforce which in October released its first report.