The world’s largest Blockchain lending marketplace, BitLendingClub, has announced its sudden shutdown due to what it describes as regulatory pressure.
The Bulgarian-registered startup has operated since 2014 and has funded almost 10 thousand loans worth in excess of $7 mln. Now, its operations are ceasing, with existing users retaining minimal functionality in order to move funds out.
The company adds:
“However, over the last year or so, the regulatory pressures has 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 (sic) terminating the services effective immediately.”
The functionality will begin to be reduced from next week.
The burden of compliance
The move reflects the continued difficulties faced by cryptocurrency-based finance startups with regards to legislation. While the EU has been fairly accommodating to disruptive finance overall, as witnessed in activity in the Netherlands, ensuring businesses conform to the requirements can overbearingly restrict functionality.
BitLendingClub said the shutdown was part of the reality of operating a business in the Bitcoin ecosystem. “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,” the company explained.
As recently as September, BitLendingClub was still growing, launching its latest additional tool called Loanbase. Focused on the Latin American market, Loanbase was designed to provide funding to small and medium-sized businesses. It is unclear whether the offshoot will continue to operate in the absence of its parent.
Meanwhile, other Bitcoin lending platforms continue to thrive. German operator Bitbond even recently announced an awards scheme asking users to vote for their favorite P2P lending blog, the nominees however not including BitLendingClub.