Top 10 Bitcoin Startups Failed in 2015
05.01.2016
Startups are still created, and a part of them successfully passes all stages of development. However, according to the majority of financial experts, the time when anybody was able to establish a startup easily has passed.
Nowadays market consolidation dictates its own terms, and only businesses with strong concept, professional team, solid financial base and promising perspectives are able to stand and survive.
The preceding 2015 was successful for many Bitcoin-companies, which succeeded to demonstrate their productivity, expand capacity and scale up; nevertheless, there were businesses which had to announce their failure.
Every business had its own reasons for dissolution of a company, including lack of funds for further development, frauds and strong competitors. During the past year more than ten startups became a history and came to an end. Today we are going to review some of them.
1. Ponzi scheme – that is the key accusation against Josh Garza, CEO of GAW Miners, by US Securities and Exchange Commission; moreover, Josh was accused in sale of unlicensed securities. Accusations were preceded by outstanding liabilities to client, numerous lawsuits, employee layoff and unprofitability of their own currency paycoin. As of now, the company is closed and suffers legal wrangling on indemnity of losses for numerous clients.
2. Mark Cummins, the Director of Mining ASIC Technologies, filed a bankruptcy petition. The company offered its clients to deposit a payment for “miners” in an amount equal to 35% of the cost. The company failed to its liabilities explaining its insolvency by failure of equipment operation. In September 2014 clients were informed about problems with air-cooling of chips and promised to fulfill obligations directly after solving this simple technical issue; unfortunately, this didn’t prove to be the case. The company is bankrupt.
3. Very interesting and modern at first sight startup Bonafide became bankrupt in November last year. Moreover, less than one year prior to announcement of its liquidation the company received a solid financial support from large investors in the amount of $850,000. The company’s main business was supply of interface for application programming to companies involved in currency exchange and offering services for cryptocurrencies, in such a way adding to credit of Bitcoin-companies. Company’s founders with sincere grief announced to journalists that they were not met with support from customers, so investors weren’t interested to continue the business. Alas! The beginning was so promising.
4. Next bankrupt was not able to withstand competition, as it often happens with pioneers. The company Brawker was founded in April 2014, and in April 2015 it closed its doors. Absolutely decentralized platform allowed purchasing goods for Bitcoins. With launching Bitcoin-cards and sharp increase of sellers in the market, it was resolved to close the company. Hope, it was a useful experience for project-founders and they will come up in the market once more.
5. Frightened with licensing of crypto-companies’ activity in June 2015, ВТС-mining pool under the name BTC Guild stopped its operation. Reforms of New York regulatory system concerning cryptocurrencies forced representatives of the mining company to close its operation by reason of possible legal issues they wouldn’t like to face. Nevertheless, the situation changed and miners from BitLicense were freed. Unfortunately, BTC Guild was closed by that time.
6. The amount of claims and lawsuits exceeded capability of Bitcoin-mining company CoinTerra, so its management filed a bankruptcy petition. Valuation of company’s assets exceeded ten million dollars. The bankruptcy petition was filed in the beginning of 2015 after numerous charges from providers and data processing centers along with complains from investors and lenders. All company’s assets after the sale will be used for offset of debts.
7. Arguments of financial regulators became the principal reason for dissolution of Harborly, the company specialized in cryptocurrency exchange. According to the founder of the company, nobody expected such severe demands on the part of regulatory authorities of different countries; after internal financial analysis it became clear that the company had insufficient funds for a good start. It was closed in August 2015.
8. Crawdfunding company Swarm as opposed to above mentioned startup-projects was closed in September last year due to disagreement within the company. We are likely to see several similar projects in the nearest future.
9. Without giving any reasons and reasonable justification Yacuna (European exchanger) stopped its operation in November last year. Given all the mysterious and groundless dissolution of the company, we have to give credit to startup’s management for their honesty. All clients received a letter from the company offering to withdraw funds from their wallets due to the closure of the company.
10. Startup 37coins faced a number of huge obstacles, so management refused to cope with problems. In December managers asked all users to funnel assets out of the company. By way of reminder, the company planned to offer cheap transactions via mobile technologies.
We are waiting for new interesting, profitable and genius projects in the upcoming year! And we recommend all new startupers to take notice of mistakes of their forerunners!
Back
Nowadays market consolidation dictates its own terms, and only businesses with strong concept, professional team, solid financial base and promising perspectives are able to stand and survive.
The preceding 2015 was successful for many Bitcoin-companies, which succeeded to demonstrate their productivity, expand capacity and scale up; nevertheless, there were businesses which had to announce their failure.
Every business had its own reasons for dissolution of a company, including lack of funds for further development, frauds and strong competitors. During the past year more than ten startups became a history and came to an end. Today we are going to review some of them.
1. Ponzi scheme – that is the key accusation against Josh Garza, CEO of GAW Miners, by US Securities and Exchange Commission; moreover, Josh was accused in sale of unlicensed securities. Accusations were preceded by outstanding liabilities to client, numerous lawsuits, employee layoff and unprofitability of their own currency paycoin. As of now, the company is closed and suffers legal wrangling on indemnity of losses for numerous clients.
2. Mark Cummins, the Director of Mining ASIC Technologies, filed a bankruptcy petition. The company offered its clients to deposit a payment for “miners” in an amount equal to 35% of the cost. The company failed to its liabilities explaining its insolvency by failure of equipment operation. In September 2014 clients were informed about problems with air-cooling of chips and promised to fulfill obligations directly after solving this simple technical issue; unfortunately, this didn’t prove to be the case. The company is bankrupt.
3. Very interesting and modern at first sight startup Bonafide became bankrupt in November last year. Moreover, less than one year prior to announcement of its liquidation the company received a solid financial support from large investors in the amount of $850,000. The company’s main business was supply of interface for application programming to companies involved in currency exchange and offering services for cryptocurrencies, in such a way adding to credit of Bitcoin-companies. Company’s founders with sincere grief announced to journalists that they were not met with support from customers, so investors weren’t interested to continue the business. Alas! The beginning was so promising.
4. Next bankrupt was not able to withstand competition, as it often happens with pioneers. The company Brawker was founded in April 2014, and in April 2015 it closed its doors. Absolutely decentralized platform allowed purchasing goods for Bitcoins. With launching Bitcoin-cards and sharp increase of sellers in the market, it was resolved to close the company. Hope, it was a useful experience for project-founders and they will come up in the market once more.
5. Frightened with licensing of crypto-companies’ activity in June 2015, ВТС-mining pool under the name BTC Guild stopped its operation. Reforms of New York regulatory system concerning cryptocurrencies forced representatives of the mining company to close its operation by reason of possible legal issues they wouldn’t like to face. Nevertheless, the situation changed and miners from BitLicense were freed. Unfortunately, BTC Guild was closed by that time.
6. The amount of claims and lawsuits exceeded capability of Bitcoin-mining company CoinTerra, so its management filed a bankruptcy petition. Valuation of company’s assets exceeded ten million dollars. The bankruptcy petition was filed in the beginning of 2015 after numerous charges from providers and data processing centers along with complains from investors and lenders. All company’s assets after the sale will be used for offset of debts.
7. Arguments of financial regulators became the principal reason for dissolution of Harborly, the company specialized in cryptocurrency exchange. According to the founder of the company, nobody expected such severe demands on the part of regulatory authorities of different countries; after internal financial analysis it became clear that the company had insufficient funds for a good start. It was closed in August 2015.
8. Crawdfunding company Swarm as opposed to above mentioned startup-projects was closed in September last year due to disagreement within the company. We are likely to see several similar projects in the nearest future.
9. Without giving any reasons and reasonable justification Yacuna (European exchanger) stopped its operation in November last year. Given all the mysterious and groundless dissolution of the company, we have to give credit to startup’s management for their honesty. All clients received a letter from the company offering to withdraw funds from their wallets due to the closure of the company.
10. Startup 37coins faced a number of huge obstacles, so management refused to cope with problems. In December managers asked all users to funnel assets out of the company. By way of reminder, the company planned to offer cheap transactions via mobile technologies.
We are waiting for new interesting, profitable and genius projects in the upcoming year! And we recommend all new startupers to take notice of mistakes of their forerunners!
Back