In a shocking announcement, Alex Green, CEO of Moopay LTD revealed on October 14, 2014 that Moopay will be filing for bankruptcy, ceasing all operations. Through a blog posting on the official Moolah page, a bitcoin exchange, Green explained the hardships that the company is facing and the future of Moolah, MintPal and MooFarm.
“After 10 months as a high-risk startup in a volatile environment, Moolah has reached a stage where it is unable to continue operations in today’s market. With rising costs and dropping revenue, and the loss of a number of key clients vital to the ongoing operation of the company, we are no longer able to continue functioning.”
Citing rising legal costs, support staff and operational expenses as major areas outweighing Moopay’s total income, Green expressed that in a the last month the company spent their reserves and now face a negative income.
In an attempt to save the business, the Moopay team took a personally funded trip to Asia to gather more contracts. The mission failed due to a lack of Asian-company interest into entering agreements with non-Asian companies.
“We have lasted longer than most expected us to, longer than we statistically should have, and held up against competition with millions in funding. Sadly, this has all come to an end; and we have joined the large list of startups that fail on a daily basis.”
The company is offering everyone the month of October to withdraw their funds, but will be closing their doors officially on October 31. If users fail to withdraw their funds, they will supposedly receive an email asking them where they want their funds to go. Moofarm is a separate company than MooPay LTD. and supposedly received an email giving them directions on next steps. The contents of that email are currently unknown to CCN at this time.
Shortly after the announcement, Bitcoin Foundation director Brock Pierce sent a tweet to Moolah’s official account, saying simply the following:
@moolah_io Contact me.
— Ƀrock PiErce 🦄🎩🙏🏼 🇵🇷🇵🇭 (@brockpierce) October 14, 2014
Also Read: Moolah Feels The Heat of the Spotlight
What Happens to MintPal?
MooPay announced earlier this year that the popular cryptocurrency exchange MintPal was an acquisition. Unexpectedly, that is not the case as Green explained on Reddit.
“Moopay LTD did not own MintPal in any way, shape or form. We had a management agreement in return for a 10% fee. The beneficial owners of the exchange have sourced an alternative management team, and I honestly hope they do a far better job than we did.”
This non-ownership is a completely different announcement, as Green specifically called it an acquisition a few months ago. Nonetheless, MintPal was taken down immediately due to a “critical bug,” reminding users to be incredibly careful when keeping money on an exchange. At the moment, all funds are locked, and users are unable to withdraw from the platform.
“The new management team will be making a number of stability changes, UI improvements and bug fixes. They will also be handling the resolution of issues surrounding missing balances. An update will be following on mintpal.com shortly, with details of further timeframes.”
The news is devastating, as it calls back to the days of Mt.Gox when infamous CEO Mark Karpeles had the withdraw function shutdown. The difference now is that MintPal was mainly an altcoin exchange, not a major Bitcoin exchange.
Alex Green, Skepticism and a Lesson in Trust
Less than a month ago, a redditor on the Dogecoin subreddit commented on a thread addressing Moolah holding funds. The redditor said the Green hadn’t been on reddit for a few days, and their payment processing company Prelude experienced a slew of problems.
The user offered up the topic on what the Dogecoin community would do with the inevitable disappearance of Moolah or Prelude. Green reappeared assuring the user that the company was here to stay:
“It’s not time for anything, we won’t be disappearing – activity on our core platform is at an all-time high.”
Of course, now with the announcement that Moopay will be filing bankruptcy, it seems as though Green was not being entirely truthful on their future. Along with that, he was not truthful with the site’s recent performance as he claimed it was now at an all-time low.
Images from Shutterstock.