Lykke Exchange promised something no other crypto exchange dared to: zero trading fees. For years, it stood out as a bold experiment in financial innovation - a Swiss-based platform where you could trade Bitcoin, Ethereum, USD, EUR, even digital gold and silver, without paying a single cent per trade. It sounded too good to be true. And in the end, it was.
What Lykke Exchange Actually Offered
Founded in 2015 by Richard Olsen, a well-known name in foreign exchange, Lykke didn’t just want to be another crypto exchange. It aimed to be a full financial marketplace. You could trade crypto against fiat currencies like Swiss francs and British pounds. You could even trade digital versions of precious metals - a feature almost no other exchange had. Its mobile app was clean, intuitive, and worked smoothly for both beginners and experienced traders.
The platform used what it called "colored tokens" - digital representations of assets like Bitcoin or gold. These tokens weren’t actual coins on the blockchain. They were just records inside Lykke’s system. If something went wrong, Lykke claimed it could cancel the hacked tokens and issue new ones. It sounded clever. But it was also a huge red flag.
Lykke didn’t charge trading fees - ever. Not for makers, not for takers. Withdrawals? Free for fiat. Bitcoin withdrawals cost just 0.0005 BTC, which was cheaper than most competitors. Deposits via wire transfer or credit card? No fees from Lykke. At first glance, this looked like a gift to traders. But there was a catch: liquidity.
The Hidden Cost: Poor Liquidity
While Lykke didn’t charge fees, it made up for it with wide spreads. That means the difference between the buy and sell price was much larger than on bigger exchanges like Binance or Coinbase. If you tried to buy Bitcoin during a price spike, you’d pay significantly more than the market rate. Sell? You’d get less.
Active traders noticed this. Reddit threads from early 2024 were full of complaints: "My order took 12 seconds to fill on Lykke. On Kraken, it was instant." Another user wrote: "I lost $150 just because the spread was 3% wider than everywhere else. I didn’t even realize until it was too late."
Lykke had only about 150,000-200,000 active users before its collapse. Compare that to Binance’s 120 million. Small user base meant thin order books. Thin order books meant slippage. Slippage meant losses. Even with zero fees, you were still losing money on every trade.
The Security Promise That Never Held Up
Lykke claimed it had a safety net. If hackers stole funds, they’d issue a signed refund within two weeks. Sounds reassuring? It wasn’t. There was no third-party audit. No insurance fund. No cold storage breakdown. Just a promise written in a blog post.
Then came June 4, 2024.
A hacker broke in. They drained about CHF 22.8 million - roughly $25 million USD - from Lykke’s wallets. That was a quarter of the entire company’s assets. The exchange immediately halted all withdrawals. The website went quiet. Customer support stopped answering. Emails bounced back as automated replies.
Lykke’s "colored tokens" system didn’t save anyone. The stolen tokens were canceled - yes. But new ones were never issued. Why? Because Lykke didn’t have the money to cover them. The refund policy? Gone. Vanished. No one got paid.
What Happened After the Hack?
By October 2024, Lykke posted a vague update: "The systems are ready for full operation. We are deciding whether all other conditions for continuation are met." It sounded hopeful. But it was a smoke screen.
By November 2025, multiple financial watchdogs confirmed Lykke had been declared insolvent. Its proprietary token, LKK, dropped to $0. Its website became a static page with no login option. Customer support channels were permanently offline. Trustpilot showed 87% of recent reviews were from users who lost everything.
One user, "CryptoLoser88," posted on October 12, 2024: "I had $3,200 in ETH and BTC. After the hack, they promised to refund me. Four months later, I got an auto-reply saying "We are reviewing your case." I’ve sent 17 emails. No one answers. I’m out $3,200 and counting."
There were no class-action lawsuits. No recovery fund. No official announcement of bankruptcy. Just silence.
Why Lykke Failed When Others Survived
Lykke wasn’t the first exchange to collapse. But it was one of the most dangerous because it looked legitimate.
It was based in Switzerland - a country known for financial stability. It had a professional website. It offered 24/7 live chat (before the hack). It was listed on CoinMarketCap. But here’s the truth: Lykke was never regulated by any major financial authority. BrokerChooser called it out in 2023: "We wouldn’t trust LYKKE with our own money as it is not regulated by a financial authority with strict standards."
Most major exchanges - Binance, Kraken, Coinbase - are regulated. They hold user funds in segregated accounts. They carry insurance. They get audited quarterly. Lykke had none of that. It operated like a startup with big dreams and zero safeguards.
Its zero-fee model wasn’t sustainable. It couldn’t attract enough volume to offset the cost of running servers, compliance, and support. So it relied on user deposits to fund operations. That’s called a Ponzi structure - not illegal, but incredibly risky.
What You Should Learn from Lykke’s Collapse
If you’re looking for a crypto exchange today, ask yourself these questions:
- Is the exchange regulated by a recognized financial authority like FINMA, FCA, or SEC?
- Does it use cold storage for 95%+ of user funds?
- Is there a publicly available audit report from a reputable firm?
- Are withdrawal limits and fees clearly listed - not hidden behind "zero fees" marketing?
- Does it have a proven track record of surviving market crashes and hacks?
Lykke had none of these. It had a flashy interface, a catchy slogan, and a founder with a good reputation. But none of that protects your money.
Final Verdict: Don’t Even Consider Lykke
As of February 2026, Lykke Exchange is dead. No one is trading on it. No one is getting their money back. The website is a ghost. The mobile app won’t connect. The company is gone.
Its story is a warning. Not every exchange that looks professional is safe. Not every zero-fee offer is a gift. Sometimes, it’s a trap.
If you’re looking for a reliable exchange today, stick to the big names with clear regulation, transparent audits, and real insurance. Lykke was a gamble that lost. Don’t make the same mistake.
Is Lykke Exchange still operational in 2026?
No, Lykke Exchange is not operational as of February 2026. Following a major cyberattack in June 2024 that stole approximately CHF 22.8 million (around $25 million USD), the exchange halted all withdrawals and ceased customer support. By late 2024, it was declared insolvent. Its website is now static, its mobile app no longer connects, and all trading functions have been permanently disabled.
Did users get their money back after the Lykke hack?
No, users did not get their money back. Lykke claimed it would issue refunds within two weeks of a hack, but this policy was never fulfilled. After the June 2024 breach, thousands of users reported their funds were permanently locked. Over 87% of recent reviews on Trustpilot and Reviews.io confirm complete loss of access. No compensation was ever paid, and there is no active recovery process.
Why did Lykke Exchange have zero trading fees?
Lykke claimed zero fees to attract traders away from competitors like Binance and Coinbase, which charge 0.1% or more per trade. But this model wasn’t sustainable. Without fees, Lykke relied on user deposits and high trading volume to cover operational costs. With low liquidity and only 150,000-200,000 users, it couldn’t generate enough revenue. The zero-fee model was a marketing tool that masked deeper financial instability.
Was Lykke Exchange regulated?
No, Lykke was not regulated by any major financial authority. Although it was based in Switzerland, it did not hold a license from FINMA (Swiss Financial Market Supervisory Authority) or any other recognized regulator. BrokerChooser explicitly stated in 2023 that Lykke "is not regulated by a financial authority with strict standards." This lack of oversight meant there was no legal requirement to protect user funds or maintain reserves.
What made Lykke’s "colored tokens" system risky?
Colored tokens were digital representations of assets (like Bitcoin or gold) stored only within Lykke’s internal system - not on public blockchains. This meant users didn’t truly own their assets. If Lykke’s system was hacked or shut down, users had no recourse. The system assumed Lykke could always replace stolen tokens, but it had no backup funds or insurance. When the hack happened, there was nothing left to replace them with. It turned out to be a dangerous illusion of security.
Could Lykke have survived if it hadn’t been hacked?
Unlikely. Even before the hack, Lykke struggled with poor liquidity, high spreads, and low trading volume compared to major exchanges. Its zero-fee model couldn’t generate enough revenue to cover compliance, infrastructure, and support. Analysts from FXStreet and Crypto Bureau noted its business model was inherently fragile. Without massive funding or a merger with a larger player, it would have collapsed under financial pressure - the hack just accelerated the inevitable.