Bitcoin-based P2P loans company BitLendingClub has officially announced its closing operations. The startup announced its departure via its blog, stating “regulatory pressures” forced the decision.
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BitLendingClub Shutting Down Due to Regulations
In a letter to customers on December 1, the company BitLendingClub advised it will be shutting down. The company, founded in 2014 by CEO Kiril Gantchev, performed peer-to-peer bitcoin lending. The startup said the platform provided the digital currency environment with a much-needed service. However, over the past year, the firm said “regulatory pressures” have burdened operations and “it is no longer feasible to maintain” the service.
The company said it will remain operational for a short period in order to settle outstanding loans. It added there will be “no new registrations, loan requests, verification of new users, investments or anything else.” Users will be allowed up to thirty days to withdraw, when the last loan on the platform is paid in full. BitLendingClub then apologized for the inconvenience and said it wished things were different.
“We’re extremely sad to be delivering this news, but that’s the reality of operating a business in the Bitcoin ecosystem. There are regulatory pressures, which make business extremely difficult and we have always done everything possible to be compliant with regulators. Given that we’ve reached the point where it is no longer feasible to run the platform and be compliant, we have decided to terminate the platform.”
Other Online Bitcoin Lenders Remain
While BitLendingClub discontinues operations, there are still bitcoin loan operations available to consumers. BTCJam is the most popular bitcoin lending platform in the industry, founded in October of 2013 by Celso Pitta. The San Francisco-based BTCJam has been very successful, facilitating US$11 million worth of loan volume. The company has over 100,000 users from all across the globe and recently acquired $1.9M Series A funding on October 29, 2015.
Another available bitcoin online lending platform is Bitbond, which allows “borrow and investing without borders.” The German company was founded in 2013 as well by Robert Nasiadek, Radoslav Albrecht, and Jürgen Walter. Just recently the bitcoin lending startup was licensed by the German financial regulatory entity BaFin. Bitbond claims it has users spanning from 120 countries and has processed over 1,400 BTC loans.
The closure of BitLendingClub shows regulations can bring negative consequences to small bitcoin operations. The company expects to dissolve by August of 2017 depending on the settlement of loans being finalized.
The online lending industry is sure to incorporate bitcoin in the future as the economy is $180 billion worldwide. As BitLendingClub closes its doors others are sure to take its place, and competitors like BTCJam and Bitbond hope to remain sustainable.
What do you think about BitLendingClub closing operations due to regulatory pressure? Let us know in the comments below.
Images courtesy of Shutterstock, Pixabay, BitLendingClub, BTCJam, and Bitbond websites.
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