Fiscal services providing company- FairX-known for banking and digital assets has closed down its processes as its attempt to establish a licensed national bank was unsuccessful.
Based on information provided by a FairX Twitter thread on the 19th of July, it was revealed that the company did not meet up with the criteria of setting up a licensed national bank owing to a lack of funding. After the history of unsuccessful funding in 2018, there has been hesitations this year to raise funds for various cryptocurrency projects & ideas. A lot of people talked about the amount of new money entering the space last year, but when it comes to actual results – it’s a known fact that nearly 90%+ of funding did not yield a ROI.
The fiscal services providing company was making an effort to raise funds for the planned bank over the past 14 months, which it labelled as a new, accredited, fully regulated national bank, developed as a financial market value, that would work alongside individuals and banks to generate a de-materialized bank deposit, denominated in United States Dollar.
The post went further to explain that the proposed dematerialized bank deposit would act, in many regards, in the same way as a stablecoin, except that it was not a stablecoin. In addition, it revealed that, stablecoin, by its definition, is not an asset that can settle transactions between banks in the background of, either, automated clearing house (ACH) or CC credit card (CC) transactions.
The firm stresses that it thrived in introducing its business idea to regulators, conforming with Know Your Customer, Anti-Money Laundering and counter-terrorism financing rules, as well as in receiving positive feedback from regulators. Unfortunately, after kicking off its binary stage, FairX grasped that it needed another instillation of capital.
It was at this juncture that the crypto investment community backed out allegedly due to the bank’s perceived centralization.
In similar news, it was earlier reported by a crypto news blog that Indian cryptocurrency exchange Cryptokart stopped its operations. Gaurang Poddar the founder of the cryptocurrency exchange, described the shutdown of the exchange as difficult, taking into consideration the hard work that was put in, but resolved that in general, the experience was positive. Poddar revealed that he was proud of the platform and appeared resolved to remain in the field. He was reported stating that he was interested in information about any establishment or individual willing to start up a new exchange.
Also, Liqui, a cryptocurrency exchange that has been in existence since 2016, announced earlier in the year that it was shutting down, naming a lack of liquidity as the primary reason. According to Liqui’s announcement, the exchange is no longer able to provide liquidity for the remaining users and do not see any economic point in providing the users with their services. It was also revealed that Liqui users would be given 30 days to withdraw their assets from the exchange. Liqui’s announcement emanated after a chain of asset de-listings, which lead some traders to believe the exchange was attempting an exit scam.
At it stands, almost half the crypto companies that previously raised money are shutting down, either because of lack of funding, lack of motivation, or because they exit scammed. What this implies to the outside world is a deficiency of development on their code base and the lack of user growth.