Factom Facing Liquidation After Creditor Refuses Request for Funding

After failing to supply further funding, blockchain firm Factom has begun the method of being liquidated. 

In an April 2 discover to buyers, Factom’s largest investor FastForward introduced the “dissolution occasion”: 

“The Firm has been notified by the administrators of Factom that in a board assembly on 31 March 2020 they concluded that, within the absence of additional funding, they now wanted to start the method of task of property for the good thing about collectors.”

Citing their failure to safe further funding, FastForward declared Factom would now enter receivership. As Factom’s largest creditor, the corporate holds over 90% of the blockchain agency’s shares and may management such issues.

Reclaiming funding for collectors

Claiming to provoke the receivership course of to “perceive extra of the occasions that led to the place”, FastForward Director Ed McDermott expressed his views on the setback:

“We’re extraordinarily dissatisfied with this information from Factom. In mild of this Dissolution Occasion below the [Simple Agreement for Future Equity] we’re taking swift motion to guard our place as greatest we will within the circumstances albeit the flexibility to generate any significant return is unsure.”

The “significant return” refers back to the collection seed funding — roughly $700,000 — which can now not have any worth. The Easy Settlement for Future Fairness (SAFE) was valued at roughly $6 million as of September 30, 2019.

Influence of dissolution on crypto exchanges

As one of many corporations chargeable for early protocols constructed into the Bitcoin (BTC) blockchain, Factom supposed to handle issues of velocity, price and bloat. Many platforms now run on high of the Factom protocol, an unalterable record-keeping system that lives as an information layer on the blockchain.

The information of the blockchain agency going into liquidation had at the least one crypto trade addressing the information. Japan-based Coincheck had simply began to make use of Factom for buying and selling on April 1, which made it a very awkward time to go below. 

In a press release on their weblog, Coincheck was fast to touch upon the lack of the corporate: 

“This gained’t have an effect on the operation of Factom protocol and it does not imply the cryptocurrency will disappear however we’re investigating the way it may presumably have an effect.”