Five Crypto Companies and Their Shutdowns

The crypto market is once again going through a phase where the noise is fading and reality is becoming more visible. While social media continues to debate the next “x” and new meme coins, five cryptocurrency companies announced their shutdown within a single week. For an industry that once promised a “new financial system,” this sounds alarming. But in a deeper sense, it may represent not just a crisis, but a painful stage of market maturation.

Against a prolonged downturn, Bitcoin has lost nearly 40% from its all-time high, venture funding continues to decline, and the industry has already cut more than 5,000 jobs since the beginning of the year. What once could be explained by poor management or bad ideas is now revealing a structural issue: the crypto market is entering a phase where only projects with real economics survive, not polished pitch decks.

On May 21, several companies announced closures, including Fantasy.top, infrastructure project Everclear, and ZERO Network, which positioned itself as an Ethereum Layer-2 solution. Earlier, Syndicate Labs and Bitcoin Depot, a crypto ATM operator, also exited the market, with the latter filing for bankruptcy in the United States. While the reasons vary – lack of revenue, weak user adoption, regulatory pressure, bear market consequences – they largely converge on one issue: building a real crypto business is far harder than issuing a token and raising capital.

Fantasy.top is a particularly illustrative case. The project ran for about two years, attempting to combine crypto with fantasy sports and prediction markets. The concept looked modern: crypto, gamification, attention trading, influencers – everything the market loves in bull cycles. But the foundation proved weak. Trading volumes never reached levels sufficient to sustain the platform long term. The team pivoted repeatedly and experimented with new formats, but never found a viable business model.

The founder, known under the pseudonym “Kipit,” admitted that the core mistake was trying to “overlay crypto onto a model that was not originally built for crypto.” This is a precise diagnosis for a large part of the industry in recent years. During the 2021 boom, everything was being tokenized: art, music, gaming items, social scores, sports cards, metaverses, even user attention. The assumption was that adding blockchain and a token would automatically create an economy. Reality proved far less forgiving.

Everclear tells a similar story. The project focused on infrastructure and cross-chain settlement – one of the key challenges in crypto interoperability. In theory, this should have been a strong and necessary niche. Yet even here, the project failed to achieve what the team called “commercial depth.”

Efforts to find buyers, shift to a partnership model, or pursue acquisition all ran into the same bear market constraint: time ran out before partner capital materialized. This is a recurring pattern in crypto. In bull markets, investors fund almost anything. In downturns, it becomes clear many projects existed only on the expectation of continued capital inflows.

Everclear is now considering open-sourcing its protocol, effectively handing it over to the community – another typical outcome in the current cycle, where failed business models are sometimes preserved as open technological infrastructure.

ZERO Network went even further, acknowledging a debate that has been ongoing in the industry for years: the world does not need endless new blockchains. The project shut down its own network to focus on Zerion’s wallet and data services. Founder Evgeny Yurtaev put it bluntly: users don’t need new blockchains – they need better access to existing ones.

This is a striking statement in an industry that spent years launching new chains faster than users could remember their names: Ethereum, Solana, Avalanche, Near, Aptos, Sui, Base, Arbitrum, Optimism – the list is endless. Each promised to be faster, cheaper, and more scalable than the last. But eventually, the market hit a constraint: there are more blockchains than users.

Against this backdrop, the shutdown of Syndicate Labs is symbolic. The company spent five years working on scaling infrastructure – one of the most hyped sectors in crypto. But even promising technology cannot survive when capital stops funding experimentation. Bear markets shift investment logic: instead of “it will grow eventually,” investors start asking “where is the revenue?”

Bitcoin Depot highlights another side of the downturn – regulatory pressure. Crypto ATM operators were once seen as a symbol of crypto’s real-world adoption, installed in retail stores, malls, and gas stations. But stricter AML requirements and increased regulatory scrutiny made the business less profitable, and combined with declining activity, eventually pushed the company into bankruptcy.

What is most interesting is not the individual shutdowns, but their synchronization. Historically, crypto moves in cycles: innovation, followed by a wave of enthusiasm and cheap capital, then overheating and excessive funding, and finally a downturn and cleanup phase.

Mass shutdowns typically occur not at peak panic, but later – often 12 to 18 months after the market top. Venture capital does not disappear instantly; most startups are funded for multi-year runways. This is why projects born during the 2021–2022 euphoria are only now collapsing.

This is not just about Bitcoin’s price decline. It is a structural feature of the crypto venture model. Projects that looked promising in an era of cheap money often prove unsustainable when investors demand actual efficiency.

Meanwhile, certain segments continue to grow. Prediction markets such as Kalshi and Polymarket recorded a combined trading volume of $23.8 billion in April – a record level.

Their advantage is simple: they monetize user activity directly rather than token price appreciation. Users participate not to speculate on “x gains,” but to make predictions and earn from outcomes. This is closer to traditional financial services, where revenue is driven by fees and transaction volume.

This marks a key dividing line in crypto today: the economy of expectations is being replaced by an economy of usage. In the past, a rising token was enough. Today, it is not.

Struggles among major firms reinforce the pressure. Bullish, BitGo, Galaxy Digital, and Coinbase all reported losses in Q1. These are no longer startups, but some of the largest players in the industry.

Still, this does not necessarily signal the end of crypto. Historically, such phases have served as cleansing cycles. After the dot-com crash, hundreds of internet companies disappeared, but the foundations of the modern digital economy were formed.

Crypto appears to be undergoing a similar transition. The era when adding “Web3” to a pitch deck was enough is coming to an end. The industry is returning to a fundamental question that traditional business never stopped asking: who pays, and for what?

Paradoxically, this may be good news for the long-term future of crypto. A market built solely on speculation is inherently unstable. A market driven by real usage tends to be more durable.

Today, the crypto industry resembles a town after a gold rush: many shops have closed, some miners have left, and the noise has faded. But it is precisely in such moments that it becomes clear who is building a long-term business – and who was just chasing the hype.

And it seems this test for the crypto market is only beginning.