IDEAS home Printed from https://ideas.repec.org/a/eee/intfin/v99y2025ics1042443124001598.html
   My bibliography  Save this article

The crypto collapse chronicles: Decoding cryptocurrency exchange defaults

Author

Listed:
  • Sapkota, Niranjan

Abstract

This research explores the factors contributing to the failure of cryptocurrency exchanges by analyzing a sample of 845 exchanges. Using logit and probit models, it identifies key variables affecting cryptocurrency exchange defaults. The results show that cryptocurrency exchanges that are centralized, located in countries with high transparency indices, and offer fewer peer cryptocurrencies are more likely to default. Additionally, exchanges that impose high withdrawal fees and have no restrictions on clients from the United States are also positively associated with defaults. Moreover, the absence of referral schemes and having lower ratings each contributes marginally to defaults. Machine learning (ML) models including random forest, support vector machine, stacked ensemble confirm the robustness and high predictability of cryptocurrency exchange defaults.

Suggested Citation

  • Sapkota, Niranjan, 2025. "The crypto collapse chronicles: Decoding cryptocurrency exchange defaults," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 99(C).
  • Handle: RePEc:eee:intfin:v:99:y:2025:i:c:s1042443124001598
    DOI: 10.1016/j.intfin.2024.102093
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1042443124001598
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.intfin.2024.102093?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Cryptocurrency exchange; Defaults; Logit; Probit; Machine learning;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intfin:v:99:y:2025:i:c:s1042443124001598. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/intfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.