Business

Steve Kaaru

Dutch crypto exchange Blockport to shut down after failed STO

Blockport, a cryptocurrency exchange based in Amsterdam, is to shut down after its security token offering (STO) failed to meet expectations. The exchange intended to use the money raised in the STO to fund its development; however, this wasn’t to be as investors remained unconvinced.

Blockport launched its STO on April 16 this year, with a targeted soft cap of €1 million ($1.13 million) and a hard cap of €5 million ($5.65 million). Investors had the opportunity to become part owners of the exchange by purchasing the Blockport Securities tokens (BPS). The minimum investment was set at €500 ($565). The STO was open to investors from the European Economic Area as well as accredited investors from the U.S.

However, on May 15 when the STO came to an end, Blockport hadn’t managed to hit its target. The exchange announced via a blog post that it would refund the investors. While the team initially said that it would take down the platform at the end of May, it was still live at press time. Some features, such as the creation of a new account, are disabled.

The founder, Sebastiaan Lichter told The Next Web: “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 further explained to the publication that his team was assisting the users withdraw the funds they had in their accounts and that the exchange would communicate the exact date when it would take the platform down.

The announcement about the failed STO had a massive effect on the value of the BPS tokens. In the 24 hours after the announcement, the price of the tokens dropped by 88%.

Despite its failed STO, the team behind the exchange is still optimistic about the opportunities in the crypto industry as it explained in a blog post, “We still see a lot of opportunities in this industry and have built a top performing trading platform that many people love to use and which has had almost zero downtime or issues since we launched it in the summer of 2018.”

This isn’t the end for Blockport, Lichter revealed. Even with its platform set to go offline, it will continue to develop its products in stealth mode. His team is also in talks with several parties who are interested in investing in the exchange. He declined to provide further details about the potential investors.

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