Crypto Industry Faces Shutdown Wave as Token Model Fails, Lacks Restructuring Path

Gate News message, April 28 — The crypto industry is experiencing a wave of project shutdowns this year, affecting trading platforms, analysis tools, and other services. Decentralized email service Dmail cited high infrastructure costs, failed fundraising, and weakened token utility as reasons for ceasing operations. Roshan Dharia, CEO of crypto holding company Echo Base, stated: “In previous cycles, projects could extend their lifespan through new token issuances or venture capital support. That pathway is now essentially closed, leading to earlier loss recognition and more operational shutdowns rather than recoveries.”

Recent project closures include DAO governance tool platform Tally, which determined the governance tools market had not scaled sufficiently and is winding down operations; Step Finance, which shut down after a hacker attack and failed to secure financing or acquisition; and BlockFills, which froze withdrawals and filed for bankruptcy in March, with creditors alleging the company misappropriated customer assets to cover company losses. Across Protocol proposed converting its token into equity buybacks in March, with backing team Risk Labs citing that token and DAO structures limited their ability to negotiate with corporate and institutional partners.

Unlike traditional companies, most crypto projects lack clear restructuring pathways when conditions deteriorate. Crypto projects typically operate through a combination of foundations, offshore entities, and token-based communities without unified legal structures governing liabilities. In restructuring scenarios, token holders typically have no formal claims on assets or cash flows. This structural deficiency, combined with narrowed funding channels and declining user activity, has made recovery increasingly difficult for struggling projects.