Saying Goodbye/Au revoir
Graaf is closing down trading operations on May 1st
After 3 long years, lots of blood, sweat and tears; it’s our time to say goodbye. We are proud to have been one of the many trailblazers in the lightning space; the very first Canadian based lightning network brokerage, but surely not the last.
With a small team we built our web application from scratch, without white label software or relying on third party API’s. When we first started in January 2018, lightning was just entering mainnet, it was an exciting time and we’ve witnessed a lot of growth in the space since then. Routing was a little bit rough around the edges in the beginning, but as the network started to grow, payments became more seamless and easy-to-use wallets became plentiful.
After about a year and a half of being live, we came to a bit of a crossroads, we wanted to focus our team on building and onboarding users for the Lightning Network, still a niche in the Bitcoin space. At the same time, the regulatory and financial obligations of being a MSB (money service business) in Canada would need to be borne by our small project. In mid 2018, well before our product was even finished, we crafted a comprehensive compliance policy that checked off the boxes of what FINTRAC (Canadian equivalent of FINCEN) listed for MSB’s (even though Cryptocurrency at the time was not explicitly covered). Eventually, FINTRAC did require registration for businesses dealing in cryptocurrency, which we also did.
Long story short, despite us taking appropriate measures to abide by the regulations, sometimes even at the cost of user experience; the bank we had used for 2.5 years had informed us that they were shutting down almost all of their “cryptocurrency business” accounts, due to a change in their direction and compliance policies. We were told there was no specific criteria that was used, or that we could have avoided this and that we “didn’t do anything wrong”, just a blanket shuttering of accounts, ours being one.
In Canada, Bitcoin MSB banking is not easy, almost all major banks don’t allow it; some will allow you to use an account for payroll or buying bitcoin for your business; but exchanging customer funds for virtual currency is a category they often explicitly prohibit. A few options exist but often involved thousand’s of dollars in banking fees per month (>x10 the $500 we were already paying), or other expensive, tortuous arrangements. For many tiny, bootstrapped or extra-lean startups, bitcoin business banking as a MSB is out of reach.
In essence, without banking the platform we’ve built is non-functional. The project was looking at winding down or being repurposed/integrated/merged prior to this banking news, and now it feels natural to hang up the skates.
We’re proud of what the team built, something small but special, maybe a sign of what’s to come in the lightning space. Thank you to every single one of our users, who at times, may have felt like testers, for bearing with our little bugs and being pioneers of lightning, right alongside with us.
We’d also like to thank Fulgur Ventures, their support was critical to building our project and the work they do in the lightning space is incredible. Not only does Fulgur help fund small lightning projects, but they also spend a lot of time being champions for lightning, networking and bringing traditional VC’s into the fold, linking resources to entrepreneurs, paying for and publicizing research and much more to grow the ecosystem.
If you’re a customer of Graaf’s please check your balance, you can still withdraw by buying Bitcoin until May 1st. If it’s been a while since you logged in and you’re having issues, clear your browser cache as we’ve made a few changes over the months.
If you’re a business and are inquiring about our platform, either to use our tech or repurpose it for your own country, email us at info@graaf.one