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Digital currency exchange Buttercoin has announced its closure on April 10th due to lack of investment.
California-based bitcoin exchange services provider Buttercoin, is expected to be closed at the end of April due to the lack of funding.
The company stated on its website: “Buttercoin will be turning off our service on April 10th at 11PM Pacific. Be sure to move your bitcoins to another service and remove your dollar balances by Friday April 10th at 11PM.”
The users could withdraw their funds from the service until April 10th. Buttercoin says it is still “100% secure and solvent” and all funds of the users are accounted for.
“Dollar balances not removed will be sent back to the accounts they came from. Bitcoin balances in Buttercoin after April 10th will be converted to USD and sent to the bank linked to your account,” Buttercoin added.
The company, which is backed by Y Combinator and Google Ventures, failed to obtain new investment from Silicon Valley investors, who differed in their bitcoin interest.
“It’s been a wonderful ride and we’re delighted to have created a service so many people enjoy. With the dip in bitcoin interest among Silicon Valley investors, we weren’t able to generate enough venture capital interest to continue funding Buttercoin,” the company said.
Buttercoin entered the remittances market in 2013 to provide a cheap and secure way of making cross-border transactions.
According to the World Bank, about $515 billion will be sent by migrant workers to their relatives in developing countries this year.
As of September 2013, Buttercoin received around $1.6 million from investors, such as Reddit founder Alexis Ohanian, Initialized Capital, Ace & Company, investor Jake Zeller, Google Ventures’ Kevin Rose and Chris Hutchins, Floodgate, Swiss company builder Centralway and Rothenberg Ventures.
In November 2014, the firm also raised an unknown amount of funding from financial services and investment firm Wedbush Securities, thus becoming the first bitcoin company to get investment from a Wall Street institution.
Despite the case with Buttercoin, investors have poured much money into other bitcoin trading platforms over the last months. For instance, industry leader Coinbase raised $75 million in January.
However, with the expansion of such leading companies as Coinbase, Bitpay and others, it is getting more difficult for smaller companies to expand and compete within the bitcoin industry.
Buttercoin is not the only bitcoin trading platform that was recently closed. Earlier, a number of bitcoin exchanges were shut down due to different reasons. In February 2015, Crypto-Trade announced its closure, attributing it to the low volume and lack of good customer base.