Digital currency startup, Moopay, has announced it will file for bankruptcy and close on October 31. Also known as Moolah, the firm played an important role in the development of dogecoin currency.
The company’s CEO, Alex Green, posted a blog on Moolah site, commenting the shutdown: “After 10 months as a high-risk startup in a volatile environment, Moolah has reached a stage where it is unable to continue operations in today’s market. With rising costs and dropping revenue, and the loss of a number of key clients vital to the ongoing operation of the company, we are no longer able to continue functioning.”
Green noted Moolah faced a negative income, after spending all their reserves. Moreover, last month, the company lost a number of key business partnerships. “We have lasted longer than most expected us to, longer than we statistically should have, and held up against competition with millions in funding. Sadly, this has all come to an end; and we have joined the large list of startups that fail on a daily basis,” he added.
The firm’s customers can withdraw their money until the end of October. If users can’t withdraw their funds, they will be sent an email asking where they prefer their funds to go.
Dogecoin creator, Jackson Palmer, commented: “It’s sad to see anything like this which hurts the awesome folks in this community – hopefully store owners will find another solution (fairly sure Shopify now supports crypto through gateways) to accept DOGE and the migration isn’t too painful.”
“That being said, I find it hard to feel sympathy for the business – if you’re running a bootstrapped startup, you don’t go around throwing tens (or maybe hundreds if you add it all up) of thousands of dollars at sponsorships, IRC ‘soaks’ and ‘accidental’ donations. I’ve brought this up in the past, and hope that at least some people considered my advice.”
MintPal exchange, which was bought by Moolah in July, will be owned by new management. Green said on Reddit: “Moopay LTD did not own MintPal in any way, shape or form. We had a management agreement in return for a 10% fee. The beneficial owners of the exchange have sourced an alternative management team, and I honestly hope they do a far better job than we did.”
Currently, all funds are locked and the users are not able to withdraw their money. “The new management team will be making a number of stability changes, UI improvements and bug fixes. They will also be handling the resolution of issues surrounding missing balances. An update will be following on mintpal.com shortly, with details of further timeframes.”
Moolah’s bankruptcy shows that good business plan and management are crucial for the successful development of digital currency startups.