Accel-Backed Crypto Platform Pillow To Shut Operations Due To Regulatory Uncertainties

UPDATE| June 27, 09:40 PM

Pillow founder Arindam Roy said on Tuesday that the cofounders of the crypto platform have decided to shut it down and return about 80% of the total capital raised to investors. The crypto startup raised $21 Mn in two rounds, Roy added.

“The reason for our existence was to solve tangible, real financial problems in difficult economies and make people’s lives slightly better. To that end, we launched products in digital-asset savings, digital-asset backed payments, and payments,” Roy said in a statement posted on Twitter.

However, difficult regulatory headwinds made this mission impossible for a company of Pillow’s size, leading to the decision of shutdown, the statement added.

Original Story | June 23, 17:10 PM

Crypto investment startup Pillow is shutting its operations on July 31 amid the ongoing funding winter and uncertainty in the crypto market.

In a message to its users, Pillow cited regulatory uncertainties and a tough business environment behind its decision.

“We regret to inform you that the Pillow team has made the decision to no longer provide our current services through the Pillow app due to regulatory uncertainty, and will be closing operations on July 31,” it said to its users.

The startup also informed its customers that they would immediately stop earning interest on their investments and their rewards section would also be no longer accessible. The users will get a consolidated statement of all their transactions on the Pillow app on or before August 7, 2023.

Funds withdrawals will be open till July 31 and bank withdrawals will be live till July 7, the message said.

Founded in 2021 by Arindam Roy, Rajath KM, and Kartik Mishra, Pillow claimed to have a community of more than 75,000 users. It allowed customers to invest in US dollar-backed stablecoins and cryptocurrencies like Bitcoin and Ethereum through its app.

In October last year, the startup raised $18 Mn in its Series A funding round co-led by Accel, Quona Capital, Elevation Capital, and Jump Capital.

In India, the crypto industry continues to face an uncertain regulatory environment, with the Reserve Bank of India (RBI) strongly opposing crypocurrencies and seeking a ban on them.

Earlier this year, Bengaluru-based crypto platform WeTrade also shut its operations.

Another Bengaluru-based crypto startup Flint Labs decided to discontinue its Flint Money app owing to several regulatory challenges, unfavourable market conditions among other issues.