Why did this hot cryptocurrency company halt new account signups?

Just one year ago, Ripple Labs was making waves as a competitor of sorts to the buzzy cryptocurrency bitcoin. This summer has been a bit of a different story: FinCEN, the federal agency tasked with fighting financial crime, took enforcement action against Ripple, and the company has paused new signups for one part of its business.

While bitcoin is one cryptocurrency, and it runs on an underlying network also called Bitcoin, Ripple is a separate internet protocol that allows for the exchange of multiple currencies—both crypto and fiat. (Here’s where it can get confusing: Ripple also has its own native cryptocurrency, XRP, the second-largest digital currency by market cap.) An Entrepreneur story last year asked whether Ripple might be “the next bitcoin.” A video at Bloomberg suggested that Ripple had big plans to “take on bitcoin.” It has raised some $34 million in four rounds of funding, including from Andreessen Horowitz.

But last month, Ripple quietly halted all signups for new accounts on Ripple Trade, its consumer wallet for individual users. (That is: not for banking and institutional customers.) The company didn’t make any formal announcement, put out a press release, or write a blog post. Rather, it began the pause on June 3 and shared the news with some users on Ripple’s forums, then last week added a short note to the top of its Ripple Trade web site: “Notice: Ripple Trade encourages customer identification but it is optional until August 30, 2015. Existing users have through August 30, 2015 to verify their identity details in order to access Ripple Trade. We are pausing account sign-ups until further notice.”

So: is the company pivoting its model? “No—we’re not restructuring or pivoting,” a spokesperson said in a statement sent to Fortune. “Ripple Labs continues to grow worldwide… As we

Originally appeared at: http://fortune.com/2015/07/09/ripple-halts-new-accounts/