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Digital Asset Broker Bitit Closes Due to Regulatory Difficulties

Bitit, a French digital asset brokerage, is closing down its operations because of regulatory difficulties and massive competition. As per a notice on Bitit’s website, the company will incapacitate its crypto buying and selling functions from April 15 and halt all withdrawals on April 30. This will mark the end of all its services. Bitit was established in 2015 and was providing instant cryptocurrency acquiring facilities utilizing fiat. The platform was non-custodial, suggesting users instantly transferred the digital assets to their wallets, unlike significant crypto players such as Coinbase, Binance, and others.

Various factors were accountable for pushing the startup towards closing. Nicolas Katan, Bitit’s co-founder, and CEO said that France’s regulations on crypto companies made most of the dent. The company could not get a VASP (virtual asset service provider) status from the French regulator before the set deadline of December 18, 2020. However, the AMF enabled the company to operate. It did not allow the startup to onboard new clients. 

Bitit Lost its Credit Card Acquirer Inviting more difficulties

Katan unveiled that the platform receives 90% of its volumes from new clients, and such regulatory decisions had disabled its business. However, the regulatory decision was the last blow on the previously coping crypto startup. Credit cards were the most well-known payment option at Bitit. So when the acquirer discontinued operating with Bitit due to its internal policies encompassing working with crypto firms, it took approximately two months for Bitit to get another acquirer. Bitit, which managed most of the transactions via credit cards, lost its credit card acquirer last September. As per the CEO, that profoundly influenced the business of Bitit.

However, the startup could have pursued becoming a VSAP. It did not have adequate resources to proceed, and the crypto industry’s uncertainty with huge competition made the condition more serious. Not only regional but global opponents also affected Bitit, said Katan. It was a “fee war” with these platforms, he opined. Moreover, Bitit claims to have served approximately 500,000 consumers from across 50 nations and processed over $230 million worth of transactions. Conclusively, regulatory issues, operational difficulties, and loss of competitiveness are the fundamental reasons resulting in the closure of Bitit.

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