Coinkite Shuts Down Bitcoin Web Services to Focus on Hardware

Bitcoin web wallet provider Coinkite is winding down its web wallet service to focus on a number of new products that are “more decentralized and embodied as hardware products.”

A company statement said:

We’re still big Bitcoin fans, supporters and Hodlrs, and although Coinkite has been great adventure in the SaaS business, we want to spend more time where our heart is, hardware products, software-”not-as-a-service”, and other exciting new possibilities.

Coinkite management believes that it is time focus on fulfilling Bitcoin’s real potential, and enable individuals and businesses to “Be Their Own Bank”.

The company noted that major factors to the decision were the cost of dealing with both hacking attacks and with government regulators.

Being a centralized bitcoin service does attract attention from state actors and other well funded pains in the butt, and as a matter of fact, we’ve been under DDoS since the first month we launched—over three years–yay. Plus we have put real fiat dollars into our lawyers’ pockets, to defend our customers from their own governments. This is not what we love to do, which is coding and delivering awesome services.

Coinkite’s web services wind down plan will immediately no longer permit new user sign-ups and new API keys.

After 14 days, Tor access to Coinkite will end, the API will be disabled, and prorated balances for annual pre-paid plans will be refunded. Coinkite will encourage users to withdraw balances when logging in. New receive requests will be prevented, and zero balance accounts will be automatically closed.

After at least 30 days, all logins will lead to forced withdrawals.

Coinkite adds:

After this point, we will look at how many deposits are still unclaimed and we will offer some sort of manual process to claim amounts. You will need to verify your email address, account name and also password before we do anything. We will maintain the HSMs to ensure access to the funds going forward. If you have any questions about terms of service please review it here: https://coinkite.com/terms

The bitcoin company warns of phishing attempts in the wind down of its web wallet services:

Be aware that scammers may try to get you to log into a fake Coinkite to transfer (steal) your funds after this announcement. Please be very careful about emails which claim to be from us, telling you to do things, click on links and so on.

In terms of hardware products, Coinkite plans to launch a “Physical Bitcoin” product called Opendime.com, a completely standalone BTC terminal/hardware wallet with printer and QR scanner, other hardware products for authentication and security, general purpose stand-alone Bitcoin solutions, and hardened servers for hosting bitcoin hot wallets.