Bitcoin services startup Vogogo is closing its cryptocurrency-focused payment processing service next month after it failed to gain traction, a move that comes amid the exits of several executives and reports that at least some bitcoin services will be affected in the near-term.
Announced on 5th July, the move will see Vogogo shutting down its payments service after it completed selling its risk management business. Those two business lines were major elements of Vogogo, which raised $8.5m in venture funding in August 2014 before going public last year.
The closure is notable given the relatively small size of the country’s bitcoin industry and Vogogo’s position as a visible service provider in Canada.
One bitcoin exchange, Coinbase, which used Vogogo as a payments processor for the Canadian market, has been affected by the shutdown, telling customers in that country that it won’t be able to offer support after the end of this month.
Other exchanges that operate in Canada, most notably Kraken and QuadrigaX, say they aren’t affected by the closure.
Vogogo has been searching for new directions – and revenue – since April, public statements show, when the company announced that its board of directors was looking for alternatives. At the time, the company said it would downsize as part of a cost-cutting plan.
CFO Tom Wenz said in an interview that other assets, including an Electronic Money Institution license obtained last fall, are being looked at as revenue generators, though he said that the company wasn’t going out of business and that it has “plenty of cash in the bank”.
He said that the payment business wasn’t making enough money to keep it afloat, and that ultimately, the company opted, in a decision he said was made Monday, to close it down.