Contxto – Colombians continue to warm up to cryptocurrencies. However, for Daexs, it became more than it could handle. The startup announced this week it would be shutting down operations on its crypto-exchange platform, as well as its payment solution, Daexs Pay, for an “undefined period of time,” according to a release on its website.
In recent months its platform has experienced problems due to the increasing number of users.
As a result, Daexs decided to pause everything and develop a platform that can better handle its user bulk.
Crypto-traders have until January 21 to withdraw their fiat and crypto funds or otherwise follow a more bureaucratic process to get their money back.
Related article: Cryptotrade through Colombian Buda.com still possible through Tpaga
Quick growth and system hiccups
Sebastian Cortes and Carlos Atuesta founded Daexs in 2017 to develop solutions that harnessed cryptocurrencies and blockchain. But its crypto-trade operations didn’t begin until 2019. And it proved to be quite a success.
It was chosen as part of BBVA Bank’s Open Talent competition last year. Daexs had also expanded into Panama and reportedly ran operations for users from eight different countries.
But trouble arose late last November when its system fell and needed maintenance. This happened once again in December. Rather than wait for a third occasion, the startup has paused operations altogether.
Prior to this recent development, users were able to convert Colombian fiat and US dollars into various cryptocurrencies including Bitcoin, Ethereum, and Dash on the exchange platform. Meanwhile, thanks to its blockchain tech, Daexs Pay enabled electronic payments to any part of the globe through its app.
Related article: 13 startups in the Latin American crypto-exchange market
Causes for the crypto craze
Daexs isn’t the first to be a smash in Colombia. There are other home-grown startups like Panda Exchange that tender to the country’s crypto-trade. Mayhaps it’s popular in this Andean country because of pricing.
According to an analysis by Cointelegraph, Colombia is the Latam country where it’s cheapest to buy Bitcoin. It’s followed by the Dominican Republic and Costa Rica. Meanwhile, Argentina, Cuba, and Mexico are the most costly.
Plus, according to a survey by Toluna Insights and NY-based Bitcoin company Paxful, 86.5 percent of internet users in Colombia know what cryptocurrencies are. What’s more 80 percent would invest in cryptocurrencies according to the survey.
What I’d like to see is what percentage of the survey takers knows how cryptocurrencies work.
Hint: it’s not magic.