Neufund shuts down security token platform, blames regulators

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One of the pioneers of securities token offering (STO) has called it quits. Neufund announced recently that it would be freezing its upcoming fundraising campaigns and pivoting its operations, blaming the regulators for failing to provide guidance.

The Berlin-based company was founded in 2016 and has been enabling companies to raise funds through STOs. The company got off to a good start, helping companies raise close to $20 million through its platform. However, in recent months, the fundraising activities have dwindled, with some of the companies that were scheduled to conduct STOs on its platform opting to rely on other fundraising methods.

Neufund blamed the stance that most regulators have taken towards equity tokens. It stated, “After countless meetings between entrepreneurs with politicians and financial authorities it became clear that while there is high demand and opportunity for this type of change, the authorities have stifled this plan, blocking the innovation in its tracks.”

The company assured the token holders that they won’t lose their investment, saying all token holders will continue to have full ownership of their wallets and their tokens. They will still be able to use these tokens to collect their payouts from the companies they invested in. They can also still act on their token holder rights.

Neufund will pivot to a new product, it revealed, stating, “We are committed to dedicating all our time and resources to focus on new product development. We are hopeful with the launch of our new product, that we will open new opportunities and continue bringing value to our investors and community.”

Neufund’s CEO and founder Zoe Adamovicz singled out German securities watchdog BaFin as the biggest source of the company’s frustration.

Adamovicz stated, “We’ve engaged BaFin in a dialogue about our platform and blockchain’s solutions since 2016. We’ve been patient to their months delayed decisions, last-minute requests, and announcements that harm the businesses. But the last months showed that financial authorities are not just slow, they are paralyzed with the fear of new technologies.”

Neufund said to have attracted 11,000 investors from over 120 different countries. It focused on lowering the barriers to entry for firms that intended on raising capital. Investors could invest as low as €10 in companies listed on its platform. As CoinGeek reported, the company secured legal clearance in Liechtenstein in 2019.