16 Feb 2019
The bearish crypto market of 2018 did a lot of damage, with coins, tokens, and startups still trying to recover from it. BlockEx is a pretty good example of what the bear market can do to a startup, as it experienced major delays, changes in plans, and even layoffs.
While there were natural staff reductions in cases where a product ended up being completed, and those who worked on it knew that that is where their role ends, some of them needed to be laid off simply so that the company would survive. BlockEx's CEO, Adam Leonard, recently published a year-end review which showed that the company plans a new fundraising campaign. However, most remember BlockEx as a firm that had a very successful ICO that raised $24 million. So, the obvious question is — what happened?
BlockEx received a lot of attention when it appeared as a token-issuing platform. However, the company also planned to allow trading on their platform as well, especially when it comes to the tokens, they themselves issued. This would also allow trading shops to enter the crypto world without difficulties. They had big plans for issuing securities, especially due to regulatory approval coming from the EU regulator.
However, it was not to be, as the company started experiencing one issue after another in 2018, which turned out to be a big setback for the security tokens issued in Europe.
They had a DAXT token sale last year, which was supposed to be the main utility and provide token holders with early access to the rest of the coins launched on the platform. However, one mistake that they believe they made was insisting on strict KYC/AML practices. Not only that, but they decided not to finalize any sale until buyers — who purchased DAXT in exchange for ETH — receive their coins. After the Ethereum prices went down in January 2018, a lot of investors decided to go back on the deal, and give up on DAXT. The company had no choice but to allow it.
Even though a lot of investors decided to stay, the company still cashed out too late, with the prices of cryptocurrencies already being way lower than they were at the beginning of the token sale. The company expected to raise £20 million at the start of the sale when in reality, they ended up with barely more than one-quarter of the amount, or £5.5 million.
This, and other similar setbacks caused the company to slow down with its progress, and a lot of initiatives set to be completed in 2018 ended up being delayed. As a result, they have yet to release their mobile app, as well as to add more functionalities to DAXT, among others.
One positive thing, however, is that the company managed to survive through what is believed to be the worst year that cryptocurrencies have experienced in their entire existence. Instead, they continued releasing new products, even if they may be coming out at a slower rate than initially expected.
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