Dutch Crypto Exchange, Blockport, Shuts Down After a Failed STO, Vows to Come Back

A crypto exchange based in Amsterdam, Netherlands, has shut down its operations due to lack of operating capital but has vowed to return soon. Blockport announced that it was scaling down its operations after its security token offering (STO) did not meet the expected results.

The Next Web reports that the company was declared bankrupt by an Amsterdam court on May 21. Through a blog post, the firm announced that it was terminating its services by the end of May. However, the company’s website was still running by the time of going to press.

Blockport’s STO was unsuccessful as the company failed to raise a soft cap of €1 million equivalent of $1.13 million in May. This prompted the company’s management to file for bankruptcy which was eventually granted by the court.

Blockport founder Sebastiaan Lichter explained that the company could not continue with its operations due to lack of operating capital.

“Since our first equity fundraising (STO) round was unsuccessful, we can’t uphold our planned growth trajectory and therefore have to significantly scale down our operations and team,” Lichter explained in the blog post.

Lichter alluded that it was not economically viable and responsible to run the operations of the company without substantial investment.

Blockport STO

In efforts to get capital to enhance the company’s operations, Blockport STO was launched on April 16 and run for a month ending on May 15. Investors were given an opportunity to buy Blockport Securities, BPS, for a minimum of €500 investment.

The company’s STO was different from initial coin offering, ICO, since investors were not buying tokens only. Investors were also to get a portion of the company’s profits as well as access to its annual meetings. The Blockport’s board, as well as the management team, was also part of the STO.

However, the plans did not materialize and after the STO came to an end, the Blockport team announced the project had failed and halted its operations.

The company had given its clients a notice to withdraw any remaining funds and as per the blog post, those who have not done so can email the support for assistance on how to withdraw. According to ICObench, this was the second fundraising by the company as in January Blockport had raised about $15 million during its ICO.

STOs Taking Over from ICOs

In the recent past, STOs have become the preferred way of fundraising in the blockchain industry. Majority of blockchain, legal and financial experts opine that STOs help in addressing various regulatory challenges that have dogged ICOs.

However, in Blockport’s case, it is evident that the STO, as a last resort to fund the development of its platform, did not work. The project did not have enough appeal to attract enough investors.

Although still new in the industry, STO is touted as the new trend in fundraising and only time will tell whether it will work or not.

Blockport remains upbeat that it will return to full scale soon. Lichter explained that the company was talking with several parties with the aim of restarting its operations but did not provide further details. Lichter said further details will be provided in Q3 of this year.

Will STO be a successful way of fundraising in the industry? Share your thoughts with us in the comments section.

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Bitcoin Exchange Guide News Team
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