The Rock Trading Bankruptcy Saga: ‘I Owe You an Apology’ as Another Crypto Exchange Collapses from Mt. Gox to TRT
At the end of February, users of the Italian crypto exchange The Rock Trading (TRT) received a startling message: their exchange was having “liquidity issues”, and was “interrupting” its services. This was just the latest chapter in a long string of crypto exchange collapses, including the spectacular downfall of U.S. crypto exchange FTX.
To compound the situation, TRT’s website had become a single page, displaying the same message. All operations on the platform were paused, yet user accounts were made accessible so that they could view their balances and trading history, but not trade or withdraw money.
TRT Chief Financial Officer Andrea Medri apologized to the more than 2,370 people in the TRT Telegram group, “Do I owe you an apology? Yes, of course. I understand the fears and discomforts many of you have and all of my work is to find solutions that get us out of this storm.”
On the subject of a potential legal action against TRT materializing, some users had hope that the exchange would ride out of the crisis, with one user saying, “I have been very happy with TRT for over 6 years, and I am sure and hope that they will resolve this situation to restart even stronger and with a storm overcome as in the times of the crisis [at] Mt. Gox,” referencing the spectacular collapse of the Japanese crypto exchange in 2014.
It was back in 2011, the same year as another early European bitcoin exchange Bitstamp, that TRT was founded, with the two founders Andrea Medri and Davide Barbieri previously working together in an insurance company they started in the virtual reality space called “Second Life” in 2007. Since 2013, TRT has been operating from Malta, and it even managed to raise 1.5 million euros in funding in September 2020.
Surprisingly, despite the Italian crypto exchange being heralded as ‘The Italian FTX’, the platform only managed to attain fairly meagre trading volumes, according to CoinGecko, with barely a dollar million in daily transactions. However in March, the trading volume spiked drastically, exceeding $72 million for a single day.
Predictably, many users had reported long withdrawal times for months before the shutdown, with the Italian bank Banca Sella closing TRT’s account on the 8th of February. It is difficult to calculate how much customer money was stuck on TRT’s crypto wallets on the 17th of February, when the liquidity issues were first announced.
The Bank for International Settlements report suggested that users had been trying to “weather the storm”, by transferring to stablecoins, while whale investors likely cashed out at the expense of the small holders. Unfortunately, the BIS report also showed that the the majority of crypto app users in nearly all economies had incurred losses on their BTC holdings, with the median investor losing $431 when BTC was at $20,000 in December 2022.
It’s a familiar tale of turmoil and heartache as another crypto exchange collapses, with The Rock Trading yet another name added to a list led by the monumental downfall of Japanese exchange Mt. Gox. With a team working non-stop to manage the crisis, and users already taking action against the exchange, it remains to be seen whether TRT will manage to fight its way out of the storm.
