Back in April, a stablecoin called Basis raised $133 million through an initial coin offering (ICO) with a stacked lineup of investors including Bain Capital Ventures, Andreessen Horowitz, Valor Capital, Google Ventures and Digital Currency Group.
Now, nine months later, Intangible Labs, the company behind Basis, is shutting down operations and returning what is left of the original $133 million to its investors.
According to a recent report by The Block, which cites multiple people with direct knowledge of the situation, Basis ran into regulatory headwinds that hindered it from launching its algorithmic stablecoin.
The Basis whitepaper initially detailed a plan to achieve price stability by using similar operations to those of a bank and managing them with software instead of humans to avoid error. Most other stablecoin companies back their tokens with actual fiat currencies, which Basis described as an obvious risk.
While the specifics of the regulatory headwinds are not available, Basis was one of at least 12 blockchain projects and companies that raised more than $50 million via ICO but had yet to release a token onto the secondary market.
The Basis team was loaded with talent, with three founders who graduated summa cum laude in computer science from Princeton and at least four other Princeton grads on the team. Basis also boasted a Wharton MBA and a former Goldman Sachs legal director — in addition to its dream team of venture backers — making the startup’s failure even more surprising.
More: Stablecoin project Basis is shutting down and returning the majority of capital raised to investors
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.