UK exchange Bit121 closes after failed search for new banking partner

Today marks the final day of normal operations for UK-based bitcoin exchange Bit121. The company explained via their website that they were not officially closing, but merely entering a period of “hibernation,” and hope to re-open “at some point in the near future.” While the closure of an exchange is difficult to see as good news, Bit121 appears to be making good in its promise to return all customer funds.

The move does not come as a total surprise. The site has hand banking problems for the last several months, owing largely to their relationship with payment processor PacNet Services Ltd. Ongoing issues with PacNet resulted in a long and seemingly futile search for a new banking partner. According to CoinDesk, Bit121 claims that their inability to find a new banking partner ultimately resulted in the decision to cease operations.

All current bitcoin orders on the site have been cancelled on the site, but users appear to have full access to their funds. Withdrawals in BTC and GBP appear to be working, and automatic withdrawals for accounts with more than £1 haven been happening since last week. For accounts with less than £1 ($1.67), the company has requested that customers agree to donate their balance to the Against Hunger charity in a lump sum, as the cost of transferring the funds is more than the balance to be transferred. In all cases, Bit121 is waiving their standard £10 withdrawal fee.

Bit121 is a rare case of an exchange closing for seemingly practical reasons, rather than the plague of hacking-related failures seen in recent months. The company, which opened in November, had a daily trading volume of around £100,000 and roughly 500 registered users.