The somewhat popular P2P bitcoin loan service BitLendingClub has been forced to close up shop due to alleged “regularity pressures”. The platform will remain in a state of limited functionality while existent loans are repaid or written off.
BitLendingClub, a Bitcoin/Blockchain startup launched in 2014 as a peer-to-peer lending marketplace, has been forced to shut down due to regulatory pressures. The company sent an email to its customers on Wednesday informing them about the upcoming service termination:
We’ve worked extremely hard to build a platform and a community which is uniquely positioned to provide the Bitcoin ecosystem with a greatly needed service. However, over the last year or so, the regulatory pressures have been increasing to the point that it is no longer feasible to maintain the operation of the platform. We are regretfully announcing that we will have to begin terminating the services effective immediately.
With this blunt statement, the startup defended its decision. Although the Company’s email addressed most of the common questions about the platform’s functionality, the statement didn’t contain any references to the entities or governments pressuring for the application of regulations.
The Company said that the platform will enter a state of limited functionality, disabling new registrations or verification applications. The website will remain online while current loans expire and users withdraw their funds. BitLendingClub expects that all loans will be repaid or written off by August 2017, the date when they expect to fully terminate the service.
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.
BitLendingClub has served thousands of investors, totaling nearly $8 million in funded loans. In September of 2015, the Company rebranded to Loanbase. At the time, the company’s CEO, Kiril Gantchev, said that the decision was “part of our effort to bring the benefits of Bitcoin to the general public, without them needing to know anything about the technology.” However, one year later they switched back, moving all bitcoin-related operations again to BitLendingClub.