Bitcoin Startup Bonafide To Shut Down Its Operations

Within a year of raising $850,000 from investors including Blockchain Capital, AngelList and Quest Venture Partners, New York-based Bonafide has decided to cease operations and start liquidation, CoinDesk reported. The Bitcoin reputation startup, founded in 2013, offered an API that provided reputation data to bitcoin companies offering exchange, wallet and other services.

“Bonafide allows you to create an identity within the bitcoin ecosystem that allows you to build a reputation and receive rewards for loyalty”, the website reads.

A leading bitcoin company had approached the startup for possible acquisition, according to an email sent to shareholders and obtained by CoinDesk. However, the deal was declined as it was considered "only beneficial to team members", not investors.

In the email, co-founders Karthik Balasubramanian and Brian Moyer explained that receding investor interest from consumer-facing applications for the technology was also a reason behind the decision.

"While investment and activity continues to occur it is focused on private and alternate chains rather than bitcoin or other public chains where Bonafide operates”, Balasubramanian and Moyer wrote.

Consequently, the co-founders said that there was little probability that they would be able “to generate revenue, pivot their product or secure additional funding”, CoinDesk reported.

Moyer told CoinDesk that sustained declines in bitcoin spending by consumers also factored in the shut down and why the founding team would not be rushing to commence another project.