One of the first companies to make a token sale, Factom, notified creditors that it went into controlled administration after investors refused an appeal for additional financing.
The Factom protocol, which raised $ 140.000 in bitcoin (BTC) through the sale of "factoid" tokens, said on March 31 it had started the liquidation process, in accordance with an announcement to the London Stock Exchange by the largest supporter of Factom, FastForward.
What is Factom
Based in Austin, Texas, Factom was born in 2014 on the Bitcoin blockchain as a level without data tracking. In the following years, it announced high profile partnerships and grants with government agencies, including the Department of Internal Security, to protect or verify data.
Just last year, data security firm TFA Labs received a grant from the United States Department of Energy to use Factom's open source blockchain to protect the country's electricity grid.
FastForward, which is listed on the London Stock Exchange and has invested in a wide range of technology startups, he signed up to a $ 6 million SAFE with Factom in 2018. In its nearly six-year history, Factom has raised over $ 18 million from investors.
In an announcement, FastForward director Ed McDermott admitted that the company wasn't entirely sure how Factom ended up in a financial crisis. "We are extremely disappointed with this Factom news," he said in a statement.
"As we go through the controlled administration process and better understand the events that led to this position, our position as investors in Factom is expressly reserved."
The first alarm bells and the liquidation
"[FastForward] was informed by Factom administrators that at a board meeting on March 31, 2020 they concluded that, in the absence of additional funding, the process of assigning assets for the benefit of creditors was needed," says the statement.
Although Factom's Twitter page went silent in mid-January, alarm bells began ringing in March after the company told investors it would go into liquidation later this month unless it received additional funding.
FastForward, which held the largest stake in Factom, said it was ready to renegotiate its $ 6 million future share (SAFE) deal to attempt to attract external investment. Although he was willing to participate in another round of investments, FastForward told Factom directors that he was unwilling to lead this project.
The previously announced talks with investors were also unsuccessful. Following a board meeting on March 31, Factom finally stated to investors that it would initiate the liquidation process.
As its main investor, FastForward is now a recipient and will take over most of the company's assets and intellectual property. A timetable for the end of Factom has not been disclosed.
