Small exchanges in China are finding it very difficult to attract customers and could likely shut down soon. Local news sources reported that the top 14 exchanges in the country grab over 73% of the total transaction value. The rest of the 170 exchanges barely attract 27% of the total volume.

The smaller exchanges are finding it challenging to bring new users to their platforms, which are having problems with scaling. Eventually, these exchanges could close.

The cryptocurrency industry in China is facing several problems, including state scrutiny and an increasing number of frauds. As bigger exchanges are taking away the majority of traffic, the smaller platforms do not have much to survive off.

Last week, Cattleex, which is a small trading platform, declared bankruptcy due to low user interest and an inability to meet the miner’s requests. Some South Korean exchanges also have grave problems.

While Bithumb was hacked last week, a smaller exchange Coinrail lost millions of lesser-known ICO generated coins. Both platforms lost $30 million and $40 million, respectively. Another exchange Youbit declared itself a dead fish a few weeks ago.

It is important to note that the People’s Bank of China (PBoC) has already banned Initial Coin Offerings (ICOs) in the country and cryptocurrency exchanges have been prohibited from carrying out their activities. Most of these exchanges are targeting users based outside of China.

Southern China Blockchain & Big Data Rule of Law Research Institute Director Qi Aimin said the crypto exchange market is overheated. He also suggested that numerous exchange projects are registered each day. However, the smaller platforms do not have enough technical resources, brand value, community support and operational expertise to sustain in the market.

Smaller Chinese Crypto Exchanges Could Shut Down Soon, Experts Say was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

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