Digital Securities
Neufund Freezes Operations of Issuance Platform
Frozen
In a disappointing bit of news, one of the first STO platforms has indicated major changes. This would be Berlin based, Neufund.
This move has not come as a complete surprise. Over the past year, various companies, which initially intended on hosting an STO via Neufund, opted to raise capital through other means. The decision of these companies to do so clearly foreshadowed issues behind the scenes.
Where did it go?
Over the past few years, Neufund has notably raised large amounts of capital. This was done through, both an ICO and STO.
At this point, there is, unfortunately, not much to show for all of the money raised. While a pivot in operations may prove to be the smart move forward, no indication has been given as to what the company will look like in the future.
With millions raised, from thousands of investors, there will, no doubt, be questions that need answered for those affected by this decision.
Paralyzed with Fear
Upon announcing the decision to freeze services, it would appear as though regulations have played a role in the decision. As such, a strong criticism of regulators was provided by Neufund CEO, Zoe Adamovicz.
“Neufund has always fought for financial equality and open access to the capital for everyone. Current markets' regulation manifests an outdated paternalistic standard, over-reliant on the wealth of so-called sophisticated investors, which makes the investing available to a limited few. Since the beginning, it has been our business practice to actively engage the politicians and financial authorities in a dialogue about the opportunities of new technologies, which would open access to the capital for both: investors and entrepreneurs. We've been active participants of the discussions held at the Bundestag, 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 and avoid any dialogues or decisions hoping that someone else, like global corporations or other countries, would deal with it.”
She continued,
“…Together with our investors, we agreed that there is no reason to wait for the institutional changes. Today we have announced the freezing of all upcoming fundraising campaigns and start working on the new product, which will let us continue bringing value to our investors and community”
Past Events
Neufund was able to successfully host multiple STOs over the past two years. These events, which saw nearly 20M USD generated, represented participation from over 10,000 investors.
Unfortunately, despite these successful demonstrations of what they can offer, Neufund finds themselves in their current situation.
The following are a few examples of companies that had either completed, or intended to complete, an STO through the platform.
- GreyP
- Nu+
- Black One Entertainment
- Emflux Motors
Hope
Despite news that Neufund, as we know it, is ceasing operations, the company indicates that they are determined to find a successful path forward. Hopefully this next iteration is able to succeed where the current could not.
While Neufund has not provided insight into what their next product will entail, they have indicated that details will be coming in 2020.
Neufund Alternatives
While Neufund may not have been able to make it work as a fundraising platform, there are various others which may take up the slack. The following are just a few examples of platforms with similar capabilities and goals.
