CoinPayments Suspends Services In The US; Regulatory Trouble Or Exit Scam?

exit scam
source: yahoo finance

Within a short period, the crypto industry witnessed a series of businesses crash, alongside suffering from a prolonged bear market movement. Following this, the crypto ecosystem is also facing regulatory wrath amid recently heightened market volatility. Due to the same, eminent market participants are moving out of regions with increased regulatory oversight. However, given the rise in negative sentiment, the community is speculating exit scam rumors.

The global crypto payments gateway, CoinPayments also joined the exit queue. The platform recently announced via private emails that it is ceasing operations in the USA and advised users to withdraw funds before July 19.

In an attempt to explain its move, CoinPayments accused the United States’ updated Anti-Money Laundering (AML) regulations and consistent market changes for the sudden closure.

The CoinPayments spokesperson told BleepingComputer — “Unfortunately, due to recent AML regulations and changes, we are no longer able to provide services to the United States”, further adding that “the [U.S.-based accounts have] been flagged and will be closed on the date that is mentioned in the email that they have recently received”. However, consumer sentiment is gravitating toward exit spam speculations.

Exit Scams And Rugpulls

Simplistically, an exit scam happens when established or new businesses disappear with investors’ money by falsely claiming that they have lost access to any funds or goods due to being hacked, seized by the government, or slapped with new regulations or other problems. In such scenarios, businesses assert to have no way of reimbursing the users and eventually abandoning the project.

Exit scams can be closely compared to rug pulls in the NFT arena given their similarities. Rugpulls usually happen when crypto projects launch with an elaborate long-term roadmap, promising members high returns.

These projects gain extensive popularity with the community members’ support, claiming bluechip status for themselves. However, once the project gathers a substantial amount of funds and credibility in the market, the NFT project founders suddenly abandon the project.