How the government will respond to the bitcoin crisis
A new bitcoin exchange has announced that it will be shutting down in two weeks due to “continuing significant demand” of the digital currency.
The new exchange, Bitstamp, says it is not accepting deposits and withdrawals.
“We have reached a point where we need to make a tough decision and shut down Bitstamps trading operation,” BitstAMP co-founder and CEO Daniel Mwang told the Wall Street Journal.
“Bitstamps trade volume has become unsustainable and we are unable to continue to provide the services it needs in order to maintain our profitability.”
Bitstamping has operated as a bitcoin exchange since January.
The company announced that the shutdown would take place on Tuesday, March 2, and that it expects to remain open for a further two weeks.
Bitstamped was created by BitPay, a payment processing company that operates on top of Bitcoin’s blockchain.
The exchange’s co-founders, Nick Szabo and Michael J. Casey, say they have built the service around the principles of “bitcoin as a payment network” and are “seriously concerned” about bitcoin’s ability to replace traditional payment systems.
The startup also raised a seed round of $2.5 million in October, bringing its total funding to $20 million.
It says that it has raised more than $100 million in funding from major investors, including Andreessen Horowitz, Andreessen Media, and Kleiner Perkins Caufield & Washington.