Prosper stops its operations again

Prosper US, a person-to-person loan exchanger, has shut down its operations again, just a couple of weeks after coming out of an enforced six month spell on the sidelines. Like competitor outfits Lending Club and Loanio, Prosper was forced to close its doors to new loans last year as it looked to register its business with the Securities and Exchange Commission. But last month it received an intra-state exemption from the California Department of Corporations. This meant Californian residents and businesses could make loans, with anyone in the US able to borrow.

However, SEC registration was not completed and the company has now "decided to voluntarily shut down" operations until this is done. "As a result, due to regulatory concerns, and in the interest of working toward getting our registration statement effective as soon as possible, we are discontinuing our California intrastate offering at this time," – said the representative of the company. Existing lenders and borrowers will not suffer.

There was no explanation provided by the company for the quick U-turn or guidance on when it expects to start business again, saying only this will be "in the hopefully not too distant future".

FinovateStartup09, HomeATM, Prosper