11 Bitcoin Startups That Went Bankrupt in 2015

This year has been a year of further development for the Bitcoin industry . After the so-called “Wild West” period, when it seemed like everyone was eager to build their own Bitcoin-based service , the field has been increasingly taken seriously by larger and more professional institutions, giving them a head start.

While many notable Bitcoin names have made the news this year, there have also been companies reporting they have closed down.

These failures were caused by a variety of reasons, including increased competition, lack of cash, and even the impact of fraudulent activities.

In 2015, approximately 11 Bitcoin businesses closed down. Here’s a look at what happened:

GAW Miners

In 2015, GAW Miners was in deep trouble, with increasing controversy surrounding its mining operations and its failure to live up to its promise to set a $20 price floor for its cryptocurrency (paycoin).

Later, staff quits and email leaks became the final groans of the company's bankruptcy, which finally exited with a whimper in the middle of this year rather than destroying itself with a bang.

In the months since, GAW has been facing customer complaints and, to make matters worse, the U.S. Securities and Exchange Commission (SEC) has charged the company's former CEO Josh Garza with fraudulently selling unlicensed securities and operating a Ponzi scheme.

Mining ASICs Technologies

The bankruptcy of Mining ASICs Technologies (MAT) was announced by a judge in Maastricht, the Netherlands, late last year after CEO Marc Coumans filed for bankruptcy.

The company’s business model required a 35% deposit for a SHA-256 mining machine . But in September 2014, the mining machine did not appear in front of the customer as expected, and since then, the forum has been constantly filled with "scam" rumors.

The company responded that it was having trouble with chip cooling, and that the order would be delivered as scheduled once the problem was resolved.

But with the exception of a few customers, most did not receive the mining machines. After a minor dispute with the chip manufacturer, the company eventually declared bankruptcy and said that all requested refunds had been processed.

Bonafide

In November, bitcoin reputation startup Bonafide ceased operations, less than a year after raising $850,000 in funding from investors including Blockchain Capital and Quest Venture Partners.

The startup offers an application programming interface (API) that provides reputation data to bitcoin companies, exchanges, wallets and other consumer services.

Co-founders Karthik Balasubramanian and Brian Moyer said the gap between investor behavior and consumer-facing application technology was a factor in their struggles.

Consumers’ refusal to spend Bitcoin is another factor in companies going bankrupt.

Brawker

Bitcoin purchasing service provider Brawker also closed down in late April due to competition and workload issues.

The decentralized platform was launched in April 2014 with the aim of allowing consumers to purchase products using Bitcoin.

At the time, the company told us: “It is now possible to purchase Bitcoin with a credit card, and a growing number of merchants are accepting the digital currency.”

BTC Guild

The long-standing Bitcoin mining pool BTC Guild ceased operations at the end of June, citing New York State’s BitLicense regulatory scheme as the main reason for the closure. It said at the time that the mining pool could no longer withstand the legal threats posed by any New York regulatory framework.

A New York State Department of Financial Services (NYDFS) spokesperson later told CoinDesk that “both miners and mining pools will be exempt from BitLicense regulation.”

Buttercoin

U.S. bitcoin exchange Buttercoin shut down in April despite investors backing it with $2.1 million when it launched in late 2013.

Also saying it was “100% secure and solvent,” the platform’s closure was blamed on a lack of venture capital interest, saying:

“As Silicon Valley investor interest in Bitcoin declines, we cannot generate sufficient venture capital utilization to continue funding Buttercoin.”

CoinTerra

Bitcoin mining company CoinTerra filed for bankruptcy in January, stating that it would be unable to repay unsecured investors and listing hundreds of creditors in the document.

According to court documents, CoinTerra has between $10 million and $50 million in assets, but as much in liabilities. The company has filed for bankruptcy protection, which means it will likely liquidate all of its assets to pay back secured creditors.

The company’s closure comes shortly after CoinTerra became the target of a lawsuit by C7 Data Centers, a Utah-based hosting provider.

Harborly

Texas bitcoin exchange Harborly shut down in August, citing a lack of resources to run both the company and a separate project that co-founder and CEO Connor Black called “growth hacking tools and services.”

Digital currency regulation also had a certain impact on this decision.

Swarm

As Cointelegraph reported, decentralized crowdfunding platform Swarm also shut down in September following internal disputes and funding issues.

The company allows the sale of equity funds to raise funds using the company's own cryptocurrency.

Allegedly, Swarm co-founder and CEO Joel Dietz wrote in a now-deleted blog post that three factors led to Swarm’s demise: the co-founder and designer leaving the project, the Swarm team not agreeing to open-source its own software, and a deal with a startup accelerator draining Swarm’s coffers of $200,000.

Yacuna

European exchange Yacuna began its orderly exit from the cryptocurrency space in November after a relatively short period of involvement. The company announced its closure in an email to clients, advising them to withdraw all funds.

Speaking about the closure, executive director and chief compliance officer Mark Caruso told CoinDesk:

“We offer our service for free because we believe in the disruptive potential of blockchain technology. However, a lack of significant transaction volume and slower-than-expected growth rates have led to the decision to shut down the service.”

37coins

Bitcoin remittance startup 37coins shut down its business back in August when it announced it would cease operations and shut down its SMS-based wallet, giving customers until December 30 to withdraw their funds.

37coins is part of a startup called Plug and Play that aims to use low-cost mobile phone technology as a way to conduct cheap transactions.

But according to the 37coins team, the project encountered obstacles along the way that ultimately proved insurmountable.