BitLendingClub has announced they will be closing soon. The announcement came to users via e-mail yesterday. The news is a disappointment for enthusiasts who watched the bitcoin P2P lending marketplace falter over the past few years. BitLendingClub is blaming government regulation for their demise, and I can understand how the pressure to comply with various securities and AML rules is burdensome, but the platform itself also had major flaws.
There was a basic problem with the way loans were priced and rated, putting the power at the exchange operator instead of with users. This flaw forced bitcoin P2P exchanges to attempt to very more personal information about users, ultimately making the P2P exchange comply with AML and securities law. If the platform could remain anonymous, the exchange would have been able to sidestep at least the AML portion. I believe that bitcoin P2P lending will continue to exist, and new innovations will emerge over time.
