The crypto bear market has claimed another victim. This time its venture-backed startup Zwoop, an ambitious e-commerce AI system supposedly built on the blockchain, which has reportedly fallen into administration after a failed attempt at an initial coin offering (ICO).
According to a recent report by The Telegraph, Zwoop shuttered its operations, which included offices in Hong Kong, London and Singapore, after failing to pay bills totaling several hundred thousand pounds while leaving its more than 50 employees with unpaid wages.
Zwoop was founded in 2016 and within the year had raised $13 million from Robert Friedland, an American-Canadian billionaire and mining tycoon. However, the now-defunct startup decided in August that it would attempt to raise an addition $30 million through an ICO.
This plan never saw the light of day as the company announced one week before its ZWP public token sale that it was suspending the capital raise due to an updated legal opinion. The capital from the ICO was supposedly destined to drive app development and a substantial advertisement campaign the U.K., in addition to adding more staff.
The report indicates that after the failed ICO, an employee investigated the company’s books and found that $2 million worth of payments could not be accounted for. This has placed Zwoop’s founder, Alessandro Gadotti, in the hot seat for potential fraud, which he adamantly denies.
The story of Zwoop is one that is becoming commonplace as the crypto bear market enters its thirteenth month, as companies that thrived during the euphoria of 2017 are beginning to feel the downside of the business cycle.
More: Exclusive: Zwoop, the tech start-up backed by billionaire Robert Friedland, slides into administration
In Their Words: The Zwoop Story So Far
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.