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The headline might as well read "Circle announces imminent closure"; unless they have some real winner of a business model they haven't disclosed yet, that's th
by tortasaur 10y ago
The headline might as well read "Circle announces imminent closure"; unless they have some real winner of a business model they haven't disclosed yet, that's the end result here.
- otoburb 10y agoLooks like they've shut down their trading platform and are shifting their entire focus to the money transfer side of the business, which allows them to purely compete against other virtual currency money transmitters like Ripple who can operate in all US states (including New York which has been problematic for many virtual currency businesses[1]). My unfounded and completely wild speculation here is that dropping their trading services will reduce their expensive compliance costs, in-house development (or platform licensing) costs, and headcount. [1] https://en.wikipedia.org/wiki/BitLicense https://en.wikipedia.org/wiki/BitLicense
- mathattack 10y agoCutting their trading will also reduce their risk too, right? Trading desks need to hold reserves against their risk. (Whether for legal reasons, or just to reassure counterparties) If your capital is provided by people making bank deposits, that's cheap. If your capital is provide by VCs, that's expensive.
- otoburb 10y agoExpensive VC capital[1] being the biggest factor for this move makes much more sense. Upon reflection, the other cost savings I listed are simply ancillary, or side-benefits, after addressing the underlying driver that you identified. [1] http://www.coindesk.com/circle-raises-50-million-with-goldman-sachs-support/ http://www.coindesk.com/circle-raises-50-million-with-goldma...