Rumors of Loanbase’s Imminent Shutdown Run Rampant

[Update: Loanbase, aka BitLendingClub, has confirmed the news.]

Rumors run abound in the world of bitcoin. November has been a month spread wide with tales of China’s alleged legislation meant to restrict bitcoin trading and limit international transactions. While these rumors have not come full circle yet, one can see just how uncertain the digital currency arena can be.

Now, another rumor is striking at an inopportune time. BitLendingClub, now officially known as Loanbase, began as a seed investment in 2014. The company offers customers ways of investing and borrowing funds through blockchain technology. It also provides loans with more “affordable rates,” but a Reddit post announcing the platform’s imminent close is the cause of recent concern.

While the rumor regarding its shutdown has yet to be confirmed, users were treated to the following statement on social media:

“Dear Customers,

We’ve worked extremely hard to build a platform and a community which is uniquely positioned to provide the Bitcoin ecosystem with a greatly needed service. However, over the last year or so, the regulatory pressures have been increasing to the point that it is no longer feasible to maintain the operation of the platform. We are regretfully announcing that we will have to begin terminating the services effective immediately.”

The statement mentions that basic functionality will be maintained for the time being so customers can withdraw their funds and repay loans. The expected close date is scheduled for August 2017, though a specific day is not yet mentioned. Customers will have approximately 30 days to withdraw all their remaining monies once their loans are fully paid off. The site will the shut down once the final loan is completely repaid.

The concluding remarks of the announcement confirms just how volatile and unpredictable the world of bitcoin can be:

“Again, we’re extremely sad to be delivering this news, but that’s the reality of operating a business in the Bitcoin ecosystem.

Best Wishes, the BitLendingClub Team.”

NewsBTC will keep monitoring this story for further updates. 

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Online bitcoin loans marketplace BitLendingClub has announced via a blog post that it has officially become the world’s biggest bitcoin lending marketplace by servicing more than $430,000 worth of loans in June. With this, the company defeated its closest competitor BTCJam which served $415,000 for the same time period.

However, the success didn’t come to the company overnight, and they had been working hard for the past several months. The blog post reiterates company’s commitment to improve in various areas namely,

  1. Loss Rates – The Company focused on bringing down the loss rates and since March 2015, it has reduced it by more than 50%.
  2. Loan Voting – Since users vote up for the best loans, the best ones come to the front-page and attract more lenders.
  3. User Referrals – The new referral program launched by BitLendingClub was a huge success. User referrals brought in 30% of the new customers, which contributed to 40% of new user loan volume in June. Statistically speaking, each referrer brought in 4 new users for BLC.

Association with Boost VC benefited BLC

BLC recognizes that its association with startup accelerator Boost VC has helped them in more ways than one. The team now focuses on one task at a time instead of dissipating energy into different projects. They also listen more carefully to customers’ feedback and always ensure that customers receive the best service that they rightfully deserve.

Future Growth

The bitcoin loans company sees “a massive opportunity in bringing affordable lending to the countries where the banking system is failing them.” With crises now emerging in Eurozone and South America, the company may make inroads into these regions as well. For a nation such as Greece, which is running out of cash and faces an uncertain future, affordable loans could provide temporary comfort.

As interest rates across the world plunge to record lows, some even in the negative territory, savers are left with insignificant or no returns on their bank deposits. Other investment classes such as stocks and real estate are already kissing stratospheric levels, which makes them more risky comparative to the returns intended.

But, savers need not lose heart, for there is another way to earn great returns, and yes, it is completely legal.

The digital currency Bitcoin can also be borrowed and lent as loans at rather attractive rates, both for borrowers and lenders.

For Borrowers

The complete process of applying for a Bitcoin loan is pretty simple.

Just like in a bank, where to apply for a loan, an account is needed, similarly, while applying for a Bitcoin loan, the borrower has to set up an online account at a website which facilitates Bitcoin loans. Users will then be asked to verify their details before proceeding to the next step.

The next step requires the borrowers to enter the amount of loan, the time period of the loan, and the interest rate which he is willing to pay on the loan. If there is a lender who is ready to lend at the suggested terms and conditions, the loan process is completed.

It goes without saying that those seeking loans should maintain the highest level of integrity and make timely interest payments, in order to keep the account in good standing. Having a good online repayment history also helps in securing more loans.

For Lenders

Holders of Bitcoin who are ready to share their Bitcoins for some extra profit can consider lending to the loan seekers.

A great aspect of lending is that the high volatility risk has been eliminated. Bitcoin and other cryptocurrencies, including Litecoin and Dogecoin, are high-risk currencies, and investors with a low-risk appetite may find lending a great way to earn returns.

But, it must not be forgotten that the borrower might miss out on payments or never pay back. One way to mitigate this risk is by lending only a small number of Bitcoins and doing a background check on the borrower.

Bitcoin Loan Websites

Commercial financing backed by Bitcoin and other altcoins has gained a lot of traction in recent times, with websites providing such services mushrooming in conjunction with the expanding Bitcoin ecosystem.

Some of the prominent Bitcoin loan websites are:

BTCjam and BitLendingClub provide updated information on the loan listings, which includes amount, interest rate, percentage of amount funded, the remaining time period, expected annual percentage return (APR), ratings (or reputation), and others.

Bitbond is another well-renowned name in the Bitcoin loans industry and has catered to over 500 loans with parties from over 120 countries.

A non-commercial player, Kiva also assists in Bitcoin financing to underprivileged communities to help them with the purchase of equipments, higher education, and other basic needs.

For those who are looking to loan or borrow Bitcoins, the above sites could prove to be immensely helpful.