Banking Firm FairX Stops Operating After Problems With Its Funding, Failing to Create Licensed Bank
- Banking firm FairX shuts down its operations
- The decision was taken by the firm due to a lack of funding
The financial services company FairX had to shut its operations down due to lack of funding.
The information was released by the firm in a Twitter thread that was written on July 19. The firm couldn’t set up a licensed national bank, which is closely related to the aforementioned lack of funds.
FairX Shuts Down Due To A Lack Of Funds
During the last 14 months, the firm has been working in order to be able to set up a licensed national bank. The goal was to work as a dematerialized bank deposit that was going to be denominated in U.S. dollars.
The company commented about this financial institution:
“This dematerialized bank deposit would act, in many respects, similarly to a stablecoin, except a stablecoin this was not. A stablecoin, by its definition, is not an asset that can settle transactions between banks in the context of, say, ACH [automated clearing house] or CC [credit card] transactions.”
The firm explains that it was able to succeed in introducing its business idea to regulators and being compliant with Know Your Customer (KYC), Anti Money Laundering (AML) and Anti Terrorism Financing (ATF) rules that governments impose to crypto-related companies.
There are several companies in the crypto market that had to shut their operations down for many different reasons. In many cases, these firms operate through an illegal scheme or were affected by hacks.
In many other cases, regulatory issues affect the performance of a virtual currency firm in a specific jurisdiction.