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Bitcoin Services Startup Vogogo to Close Payment Processing Services

Last Updated March 4, 2021 4:49 PM
Lester Coleman
Last Updated March 4, 2021 4:49 PM

Vogogo Inc., an Alberta, Canada-based company that provided payment processing and transaction risk services, announced in a press release  it will close its payment processing operation and sell off assets after struggling to find ways to enhance shareholder value.

The company developed software for multiple electronic payments, including peer-to-peer and online banking systems, pre-authorized debit, card payments and direct deposit. Vogogo provided know-your-customer and anti-money-laundering services for firms transacting in bitcoin and in general.

The company, whose clients included bitcoin service providers, served the Canadian, U.S. and U.K. markets.

Vogogo Considered Its Options

A committee of Vogogo’s board of directors has explored alternatives including the sale of all or parts of the existing business, in addition to recapitalization and financing alternatives. The board concluded selling the risk platform and discontinuing the payment processing business are the best courses of action.

The committee will monetize certain residual assets, primarily the Electronic Money Institution (EMI) authorization that United Kingdom’s Financial Conduct Authority granted.

Vogogo has sold certain assets to a private risk management and consulting services firm, including the risk platform known as the Vogogo Risk and Rules Engine. It will no longer seek to sell its stand-alone risk services as part of its business offering. Certain third parties affiliated with the purchaser will terminate their rights to certain post-closing payments of up to $3 million, payable in cash or common shares, based on Vogogo achieving certain performance thresholds.

Dissolution To Occur In Stages

The company has notified third parties and all employees it will discontinue its payment processing business, which will occur over the next several weeks.

Tom Wenz, chief financial officer, discontinues full-time employment at the end of July and will serve on a part-time basis to assist the process.

The board thanked the employees for their efforts in connection with the process.

Also read: Cryptocurrency processor Vogogo closes $12.5 million

Bitcoin Exchanges Used Vogogo

Several bitcoin exchanges utilized Vogogo’s services, including Bitstamp, BitMEX, Quadriga, ANXPro, Knox Payments and 247exchange.

Vogogo last year partnered with Kraken to bring Kraken’s Canadian dollar/bitcoin exchange services to Canada, CCN.com reported.

The company closed a $12.5 million funding round last year led by a few traditional financial firms: Salman Partners Inc., Clarus Securities Inc. and Beacon Securities Limited, CCN.com reported.

The committee will continue to evaluate strategic alternatives. It noted there is no assurance the evaluation will result in any transaction. There is no timetable for the strategic review.

Featured image from Shutterstock.