French crypto brokerage Bitit is shutting down this month
Bitit, a French crypto brokerage founded in 2015, is planning to shut down. The company offered its customers a quick way to purchase cryptocurrency with fiats. However, they will be closing all activities because they’re having some regulatory difficulties and vicious competition.
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The Effect of Regulation and Competition on Bitit
Even though many reasons could have led to the shut down of Bitit, the CEO, Nicolas Katan, narrated that the regulations France has on crypto companies made situations worse.
Due to the fact that the company was unable to get the virtual asset service provider (VASP) status from the French regulator before the deadline, December 18, 2020, AMF prevented them from accepting new clients. The company plans to disable its buy and sell features on Thursday and halt all withdrawals on April 30.
According to Katan’s revelation on how funds are gotten into the company, 90 percent of its volume is received from new clients. With the said regulation, making up those volumes isn’t possible.
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After losing their credit card acquirers last September, which created a huge impact on the business, the regulatory decision was the last blow. The next two months after losing their credit card acquirers were difficult as they lost a lot of money.
Even though the company could have fought hard to acquire the VASP status, they didn’t have enough resources and were unsure of their fate in the crypto industry due to the ever growing competition.
According to Katan, even if they were able to process the VASP registration, they’d have had to wait for at least six to eight months to ensure they can recover their trading volumes, and they’re not sure they’ll succeed because of the ever growing competition in the crypto world.
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