Justcoin Exchange Collapses

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The cryptocurrency exchange Justcoin has announced that it is shutting down because of failures to keep their bank on board.

Justcoin issued a message to its users stating: ‘Justcoin is shutting down all operations…Deposits are closed. Trading will close tomorrow, October 29th. We urge all users to withdraw their funds as soon as possible. Final deadline for withdrawals is November 11th.’

Norwegian banks reject cryptocurrency

The reason they gave for doing so is: ‘Our bank has notified us that it will no longer accept businesses dealing with digital currencies. The same goes for other Norwegian banks. Without a bank account we have no business and need to shut down.

This is extraordinarily coincidental because Justcoin was embroiled in a goxxing scandal just this month. While it is true that Norway does not consider Bitcoin a viable currency, this is not especially unusual since most countries do not.

If Norwegian banks have indeed been spooked, we might wonder what Justcoin itself has had to do with the spooking, since they took it upon themselves to make unprofessional noises during the goxxing affair. Perhaps the goxxing led to Justcoin being unable to pay its debts which would lead the bank to question why. If the forthcoming answer was an untrue Justcoin rant about exploits in the cryptographic system, coupled with the fact that the exchange let a non-KYC’d customer run off with hundreds of thousands of dollars, then we can imagine the old school conservative Norwegian bankers having a fit.

Community reaction and lack of explanation

There has been some regret expressed in the Bitcoin and wider cryptocurrency communities about Justcoin’s collapse because many felt the exchange was doing honest work. However, STR and XRP holders have not received their frozen balances and many have been unable to withdraw their funds at all. This has caused consternation in the Stellar and Ripple communities, threats to sue and even some theories about the goxxing being an inside job. It is uncertain whether these theories are justified, but there are many unexplained facets to the saga.

Justcoin has never explained what they know about the goxing perpetrator and what contact they had with him/her. Even though it is almost certain that there was some contact since a significant proportion of the stolen funds were returned to the exchange.

Neither has there been any explanation offered about why Justcoin is not unfreezing balances if they have had the currency returned, or why the exploiter’s Stellar wallet inflation destination was set to Justcoin.

Another strange element that some people have picked up on is that fact that Justcoin has now removed its About Us page, which had photos and details of the staff. Perhaps they fear Cryptsy-like reprisals against them and wish to try and fade quietly into the background, particularly since it is believed by some that the founders will escape with significant profits.

It is disheartening when any cryptocurrency business collapses. It seems that we are entering a period of volatility for the business end of the industry and traders should choose their exchanges wisely. All former Justcoin customers should be sure to withdraw as soon as possible, certainly before the November 11 deadline.

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