Factom, one of the elder statesmen in the crypto world, could be set for liquidation after failing to obtain further funding. The project, which had its ICO in 2015, announced to the London Stock Exchange last week that the company behind the project, Factom Inc, was entering receivership having failed to secure the funds to keep it operational.
Existing Financial Problem
Factom Inc. had informed investors in March that it was encountering financial problems, with a notice dated the 19th of that month outlining the perilous position of the company:
Factom remains actively involved in negotiations with two industry parties but has notified shareholders that at the end of March 2020, without any additional support or funding, Factom Inc. will be forced to enter discussions with creditors about the distribution of its assets […] The Company has held preliminary discussions with management regarding a potential restructuring of Factom and its creditors, but any deal requires fresh investment in Factom by existing and new investors.
Factom was already undergoing a fundraise, but the “current global financial markets uncertainty caused by the Covid-19 outbreak” have rendered these attempts all but impossible, leading the company calling time and entering what its biggest investor called a “dissolution event”.
No Impact on the Blockchain…That We Know Of
Fortunately for the dozens of companies that run their operations through the Factom blockchain, the blockchain itself is not affected and the cryptocurrency will likely still operate. One of these is the US Electric Grid, who used the technology in a trial last year to protect their operations.
Japanese exchange CoinCheck has already stated that the dissolution of the company will not impact them, saying in announcement that “this has no effect on the operation of the Factom protocol and does not mean that the cryptocurrency will disappear”, although they do state that they are “investigating the possibility” of operational issues nevertheless.
While it is sad to see one of cryptocurrency’s older and most resilient projects come to an end, it shows the ruthless nature of the space and how there is no room for sentiment in a constantly emerging ecosystem.