Txbit was once promoted as a privacy-focused crypto exchange with low fees and simple trading. But by September 2023, it vanished without warning. No announcements. No refunds. Just silence. If you’re considering any crypto exchange today, Txbit’s story isn’t just a footnote-it’s a warning label you need to read.
What Txbit Actually Offered (And What It Didn’t)
Txbit launched in 2019 from Amsterdam, claiming to be a clean, no-nonsense platform for trading Bitcoin and altcoins. It supported EUR, GBP, and USD bank transfers, which sounded good on paper. But here’s the catch: it didn’t offer a mobile app. Not even a basic one. If you wanted to trade, you had to use a desktop browser. That alone ruled out a huge chunk of casual traders who rely on phones for quick buys or emergency sells.
The trading interface was basic but functional. Order books, charts, buy/sell buttons-all there. Nothing fancy, but nothing broken either. It had 24/7 customer support, which was rare for a mid-sized exchange. Some users appreciated that. But support doesn’t mean safety. If your funds are locked inside a platform that’s about to collapse, no chatbot can help you.
The Fee Structure That Made Trading Unprofitable
Txbit’s biggest flaw wasn’t security-it was cost. Every trade cost 0.0014 BTC. On December 2, 2021, that was about $80. Let that sink in. Most exchanges charge 0.1% to 0.6% per trade. On a $1,000 trade, that’s $1 to $6. Txbit charged $80. Even if you traded $10,000, you’d still pay $80. That’s not a fee. That’s a tax.
And there was a minimum order size of 0.0005 BTC. At the time, that was around $28. So if you had $50 to trade, you couldn’t even use half of it. You’d be forced to deposit more just to make a single trade. For small investors, this wasn’t just inconvenient-it was a trap.
Why the Lack of Transparency Was a Red Flag
Txbit claimed to prioritize security and privacy. But they never showed proof. No third-party audits. No details on cold storage. No breakdown of insurance funds. Nothing. Meanwhile, Binance publishes quarterly proof-of-reserves. Kraken releases SOC 2 reports. Coinbase is regulated in multiple countries. Txbit? Silence.
Experts call this “security theater”-making users feel safe while hiding the real risks. If a platform won’t show you how it protects your money, why should you trust it? The fact that they never disclosed their security infrastructure wasn’t an oversight. It was a deliberate choice to avoid accountability.
Regulatory Gray Area = High Risk
Txbit didn’t ban U.S. users outright. Instead, they told Americans: “Do your own research.” That’s not compliance. That’s evasion. The U.S. has strict rules for crypto exchanges. If you’re not registered with the SEC or FinCEN, you’re operating illegally. Txbit knew that. They just hoped no one would notice.
They also claimed to operate under multiple jurisdictions over time-first the Netherlands, then hints of other locations. That’s a classic sign of regulatory arbitrage: moving around to avoid rules, not to serve customers better. And it always ends the same way: with regulators stepping in, or the platform collapsing under its own weight.
Liquidity and Volume: A Mirage
Txbit’s trading volume jumped from $12,000 in 2019 to $2.1 million in late 2021. That’s a 17,000% increase. Sounds impressive, right? But here’s the reality: Binance processes over $20 billion daily. Coinbase? Over $5 billion. Txbit’s $2.1 million was less than 0.01% of that. It was a tiny pond in a sea of giants.
Low liquidity means slippage. It means you can’t sell when you need to. It means your orders get stuck. Even if you managed to buy Bitcoin on Txbit, selling it quickly for a fair price was a gamble. Most users didn’t realize this until it was too late.
User Ratings and Community Trust
With only 11 reviews on Cryptogeek.info, Txbit had almost no user base to speak of. Its 3.3/5 rating was below average. Compare that to Kraken’s 4.5/5 based on over 10,000 reviews. That gap isn’t about opinions-it’s about survival. If thousands of people have used a platform for years and trust it, that’s a signal. If only a handful have used it and barely rated it, that’s a warning.
The TrustScore system, which tracks reliability across exchanges, gave Txbit a failing grade. Why? Because it had no legal entity transparency, no clear compliance, and no financial stability indicators. These aren’t just ratings-they’re survival indicators.
The Shutdown: No Warning, No Refund
Txbit closed in September 2023. No press release. No email. No Twitter update. One day the website was up. The next, it was a blank page. Users woke up to find their accounts frozen. Withdrawals impossible. Native tokens-worthless. Bank transfers stuck in limbo.
This is the brutal truth about unregulated exchanges: they don’t fail slowly. They vanish overnight. And when they do, your money disappears with them. There’s no FDIC insurance. No government bailout. No legal recourse. You’re on your own.
What You Should Do Instead
If you’re looking for a crypto exchange today, here’s what matters:
- Regulatory compliance: Does the exchange have licenses in major markets like the U.S., EU, or Australia? If not, walk away.
- Transparent fees: Are fees listed clearly? Are they percentage-based, not flat BTC charges? Avoid flat fees-they’re designed to hurt small traders.
- Mobile app: Can you trade, check balances, and withdraw on your phone? If not, you’re locked into one device. That’s risky.
- Security audits: Has the platform published independent audits of its wallet holdings? If not, assume your funds aren’t safe.
- High liquidity: Check trading volume on CoinMarketCap or CoinGecko. Avoid exchanges with less than $100 million daily volume.
Stick with platforms like Kraken, Coinbase, or Bitstamp. They’re not perfect, but they’re accountable. They have legal teams. They answer to regulators. They don’t vanish.
The Bigger Lesson
Txbit didn’t fail because it was “bad tech.” It failed because it was built to exploit, not serve. It targeted people who didn’t know better-those who saw “privacy” and “low fees” and didn’t ask the hard questions.
The crypto world is still young. But it’s growing up. Exchanges that cut corners won’t survive. The ones that do will be transparent, regulated, and user-focused. Txbit’s closure wasn’t just a loss for its users-it was a step toward a cleaner, safer market. Don’t let your next trade be another cautionary tale.
Is Txbit still operating?
No. Txbit permanently shut down in September 2023. Its website is no longer accessible, and users were unable to withdraw funds. The exchange has not returned any assets or provided official communication since its closure.
Why did Txbit charge such high fees?
Txbit charged a flat fee of 0.0014 BTC per trade, which was around $80 in 2021. This structure was designed to generate revenue regardless of trade size, making small trades unprofitable. Most competitors use percentage-based fees (0.1%-0.6%), which are fairer and scalable. Txbit’s model favored large traders who could absorb the cost-most retail users couldn’t.
Can I get my money back from Txbit?
No. Since Txbit shut down without warning and had no legal obligations to users, there is no known recovery process. Funds held on the platform are considered lost. This is why regulatory compliance and withdrawal access are critical when choosing any exchange.
Was Txbit regulated?
Txbit was registered in the Netherlands as Txbit Exchange B.V., but it did not hold licenses from major financial regulators like the SEC, FCA, or ASIC. It advised U.S. users to assess their own legal risks, which is a common tactic used by unregulated platforms to avoid liability. This lack of formal compliance made it vulnerable to shutdown.
Should I avoid exchanges that don’t have mobile apps?
Yes. A lack of mobile access limits your ability to react to market changes, secure your funds quickly, or withdraw in emergencies. Reputable exchanges like Coinbase, Kraken, and Binance all offer fully functional mobile apps. If an exchange doesn’t, it’s often a sign of outdated infrastructure or lack of user focus.
How do I check if a crypto exchange is safe?
Look for three things: 1) Clear regulatory status in your country, 2) Published security audits and proof-of-reserves, and 3) High trading volume (over $100 million daily). Avoid platforms that hide fee structures, don’t disclose security practices, or rely on vague marketing claims like “maximum privacy” without proof.
