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It looks like the Amsterdam-based blockchain startup Blockport is facing a financial crisis. The company has declared bankruptcy after the failure of its security token offering (STO) to meet the minimum expectations in May.
Amsterdam-based blockchain startup Blockport was founded in 2017 by Kai Bennink, Sebastiaan Lichter and Zowie Langdon in Amsterdam. It was established with the aim to build a user-friendly exchange for cryptocurrency trading in an effortless manner. The company has the vision to make everyone access blockchain and cryptocurrency. But it looks like it is facing a rough patch now.
Failure to meet minimum requirements
As per the bankruptcy records, Blockport’s STO failed to reach the cap of €1 million (nearly $1.13 million) last month. As a result, the company declared and filed for bankruptcy. Between April 16 and May 15, Blockport hosted a token sale. During this sale, the crypto exchange platform had a target of raising €5 million ($5.62 million) but it did not fare as intended.
In a blog post, Blockport Founder and Chief of Product Sebastiaan Lichter started that all the participants who took part in the token sale will receive refunds for their investments. The company will not issue new BPT tokens as a result of the disastrous performance of the STO.
Not-so promising STO performance
Soon after the announcement regarding the token sale, Blockport’s native token BPT crashed hard and its value dropped by 88%. Back in January this year, Blockport raised over $15 million in the ICO.
STO is a trending fundraising method in the field of cryptocurrency as these have additional benefits. On a minimum investment of €500, contributors of the STO could get a share of the profits raised by the crypto exchange platform and access to the annual board and management team meetings held by Blockport.
Lack of interest among users
However, it looks like cryptocurrency users were not enticed in these benefits and did not find the project alluring. Lichter stated, “There are multiple internal and external factors that have played a role during our fundraise that had their effect on the overall sentiment and performance of the STO. Summing up, we think that it’s fair to say that the market has spoken, and we now have to deal with the undesired result.”
Addition of value-added features
Blockport’s trading platform will go offline and its core team will continue developments in stealth mode. The founder reveals that they will work towards making Blockport unique and add value-added features to lure investors when the cryptocurrency exchange restarts sometime in the future.
It was stated to HardFork that the company is in talks with many parties for a potential relaunch but the details regarding the same is scarce for now. It was announced that further update regarding the same will be announced in Q3 2019.
Stay tuned to Silicon Canals for more updates in the tech startup world.