blockex
Blockchain News Cryptocurrency News Fintech London Fintech Startups Fintech UK Latest News

BlockEx Flounders as Crypto Bear Continues to Bite

When you start hearing phrases like “staff reductions”, “funding difficulties” and “softening of the market”, you know there’s blood in the water and the sharks are circling…

So, is the London-based digital asset exchange platform, BlockEx, fish food or does it just need a bigger boat?

On the 18th January, Coindesk reported how BlockEx had gone from a $24 million initial coin offering (ICO) to staff layoffs and products delays in the space of a year. Now, rumour has it that senior members of staff have gone without paycheques for months and fresh investment is desperately needed to keep the stricken concern afloat.

Initially, BlockEx seemed a safe pair of hands, offering a reputable venue for digital token issuance and trading. The exchange entered a FCA sandbox to showcase its digital bond service last summer and has long called for more involvement from regulators to lend the sector credibility (the platform was also a founder member of CryptoUK, a “trade group lobbying for regulation”). Exchanges in the BlockEx model are considered by some to be a benchmark for the new tokenised economy. However, one of the platform’s main selling points could also prove its undoing.

BlockEx offers its users a smooth on/off ramp for fiat trading, allowing traders to swiftly exit stage left at the first whiff of trouble. Unfortunately for CEO Adam Leonard and crew, 2018 stank of trouble. Early last year, the cryptocurrency market found itself the reluctant host to a 500-pound grizzly bear which made itself at home and has (largely) refused budge ever since.

“You could say it’s setting back the security token industry in Europe,” Leonard told Coindesk. As bullish sentiment faded, “Most of the ICOs we contracted with killed their ICO or pushed it back into 2019.”

With revenue apparently sagging and “a consortium behind £9m of contracted and committed ICO token purchases” evaporating into thin air, seemingly solid foundations began to crumble.

BlockEx’s own ICO sale (for native token DAXT) also failed to generate the expected funding (final estimates rest around the $5.5 million mark) due to admirably close adherence to AML/KYC protocols coupled with get-out clauses for “skittish” investors. The exchange subsequently wobbled into 2019 like a Hogmanay drunk.

This annus horribilis is alluded to several times in the company’s official yearly report which puts a brave face on, “a difficult rollercoaster of a year” whilst adding that, “The future now looks brighter” with new funding poised to rejuvenate the stalling project.

So, what’s the state of the business today?

Well, that’s the 5.5 million dollar question…

When pressed for comment, BlockEx’s Head of Marketing responded by saying;

“I’m afraid we have to decline your interview/Q&A at this stage … We had actually prepared responses to all of your questions, but we are in the middle of closing a new round of funding, so subject to confidentially clauses, and have been asked not to communicate anything publicly at this point. I’m sure you can appreciate the confidentiality of these things. Once again apologies as we would have liked to help you with your article and talk openly about where we are.”

The questions which BlockEx were unable to address included;

Are customer funds safe and is the platform secure in the short term?

How much funding is required to safeguard the future of BlockEx and how soon is it needed?

What lessons have you learned from the difficulties you’ve had in past few months? What changes to your revenue model have you had to make?

How operationally functional is BlockEx right now? Are staff being paid in-full and on time?

What message would you like to send to our readers and to BlockEx users?

One imagines that these questions will still be in need of answering after the exchange closes its newest round of funding and, at such a time, perhaps they will be more willing to comment…

 

Please follow and like us:
error

Related posts

Over 50% of businesses increased their cyber security budget last year

thefintechtimes

EOS Global Hackathon Hits London Science Museum, Turns Blockchain Minds to Data Security Challenge

thefintechtimes

RegTech 2.0: A New Era of RegTech

thefintechtimes
error

Enjoy this blog? Please spread the word :)