Crypto Industry Hit by Wave of Shutdowns as Funding Drought Takes Hold
The crypto industry has been hit by a wave of shutdowns and closures, with over 100 projects ceasing operations since January 2026. RootData's 'Crypto Industry Dead Projects List' tracks this trend, counting around 110 entries by late July, including exchanges, wallets, DeFi protocols, Layer-1 and Layer-2 networks, NFT platforms, analytics tools, and games.
More than half of the closures were DeFi protocols, and the dominant driver behind these shutdowns has shifted from hack crises to a deeper funding drought. This drought is caused by venture capital contracts expiring and token-subsidized business models running out of runway.
The notables casualties include major centralized exchanges like BitMEX, which will close in September, as well as Layer-1 and Layer-2 networks like Loopring, Polygon's zkEVM, and Zero Network. The funding wall has priced out smaller teams, leaving projects with empty treasuries and limited runway.
The trend is characterized by orderly wind-downs, published final balances, and grace periods for withdrawals, unlike the sudden collapses of FTX and Celsius.