On Tuesday, Norwegian digital currency exchange, Justcoin, announced that they were shutting down, due to issues with securing a bank account. Justcoin Exchange was founded in 2013 with its office in Oslo, Norway. Justcoin was founded by Klaus Bugge Lund and Andreas Brekken. At the time of their closure, Bitcoin, Litecoin, Ripple, and Stellar were being traded on their platform. They were the #1 exchange by volume traded for both Ripple and Stellar, #11 for Litecoin, and #14 for Bitcoin.
As the news broke we immediately reached out to the Justcoin team who assured us that all customer funds were safe and withdrawals were being processed. We have since received confirmation from multiple Justcoin users that their withdrawals did in fact go through, and we have not heard from any users who have had withdrawal issues.
CoinPrices: First, can you give us a little background context on your banking relationship in Norway?
Andreas: Our bank is by far the largest in the country. We had meetings very early on. Two tech startup founders and -a lot- of bankers. There weren't enough spots at the large meeting table. Some of the bank's attendees literally had to stand during the meeting. They were very intrigued, checking out our website and related forums during the meeting. The guys from risk and compliance had a lot of questions and we affirmed that we were willing to commit to existing regulation and work together.
Since then we've been doing alright. Most issues have been complaints from us regarding slow processing times in the bank.
The blow came last week when we were told that digital currency (they call it virtual currency) is to be banned throughout the bank corporation.
CoinPrices: Have all customer deposits been returned?
Andreas:Out of our 68 645 customers, there are 1 263 users (1.8%) who still have at least 10 EUR (12.50 USD) or more left in their accounts. We will be contacting these customers using every method we can to make sure they withdraw their funds as soon as possible. Our guys at email@example.com will help you find new wallets.
CoinPrices: What led to your bank account closure? Was there any government involvement in the closure?
Andreas: Banking is complicated. The systems are old, management cost is high and fraud is rampant. We don't know exactly why they shut us down. My guess is that the clash between the new (Bitcoin) and the old (traditional banking) does not fit in their business model.
CoinPrices: Do you have any advice to other Norwegian Bitcoin startups?
Andreas: If your business model is dependant on a banking relationship, then find someoneo who already has one. Or better, stay away from fiat if you can. If you can, find an investor that understands that Bitcoin is a faster, cheaper, easier and more secure to move/store value. Make sure that investor has a long term perspective and a lot of cash.
CoinPrices: Do you feel you would have been able to stay open if you were located in the EU?
Andreas: Establishing a new banking relationship would take months. With operational costs running and no revenue from fiat/bitcoin trades coming in, we'd be in trouble anywhere in the world.
CoinPrices: You have contributed so much to the bitcoin and digital currency communities, what are your plans going forward?
Andreas: First of all, I'm working on open sourcing a lot of our work. We've already been very active in the tools used by Hive/Coinpunk/etc. and want to contribute more.
We've had a lot of digital currency investors and startups reach out to us. People even flew in unannounced to speak with us. A lot of interesting opportunities have been presented to us the last day -- and please keep them coming. One door closes and many more open.
Our team believes in Bitcoin and we believe that we have a lot more to offer.
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