March 18, 2020 | AtoZ Markets – Backed by an investment firm and hedge fund Pantera Capital, cryptocurrency exchange on the Lightning Network Sparkswap has announced on Tuesday its decision to shut services.
Sparkswap is shutting down due to inadequate users
According to Trey Griffith, Sparkswap Founder, the exchange was not able to build an adequate number of users.
“Unfortunately, we weren’t able to build a large enough audience to sustain the business over the long term. Building a cryptocurrency business, especially one that interacts with the fiat banking system, is an expensive endeavor, and as it stands right now the style of self-custody we were espousing is too niche to make our business sustainable.”
The platform already stopped taking new users along with no additional USD deposits. Existing users will have until March 24, 2020, to make any final Bitcoin purchases. Thereafter, the exchange will terminate all trading activity
According to the announcement, the fiat deposits of the traders will be kept safely with the platform’s baking partner AnchorUSD.
“AnchorUSD has mobile applications for iOS and Android, and offers a High Yield USD Interest account as well as mobile crypto tradin. You can also redeem your USD to your bank account. All fees for bank account redemptions via AnchorUSD will be waived until the end of April.”
Too many failing crypto ventures
Founded in 2017, Sparkswap is based in California. The exchange was built on the Lightning network and also got the attention of venture capitals. It raised $3.5 million from Pantera Capital, Initialized Capital, and a few others.
Last week, AtoZ Markets reported that Paradigm Labs, another Polychian-backed decentralized finance (DeFi) startup, shut down due to its inability to come up with a market-resilient product.
In February, the Hong Kong-based international crypto-focused network Bitspark shut down the services after six years of operation as the internal restructuring failed to work out.
What do you think about Sparkswap decision to shuts down? Share your thoughts in the comment section below?