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Crypto Valley failure Ailing fintech Monetas goes into liquidation again

Johann Gevers

Johann Gevers was an early pioneer of the Swiss blockchain scene with his payments firm Monetas.

(Reuters / Arnd Wiegmann)

Bankruptcy proceedings have been reignited against troubled Swiss digital payments company Monetas more than a year after the enterprise hit serious financial difficulties. Efforts to find a new buyer appear to have come to nothing as the firm goes into liquidation.

An entry in the Swiss commercial registerexternal link indicates that the courts in canton Zug have finally lost patience with Monetas, which has been dissolved. The company had been granted several stays of execution amid hopes that it could find a new owner.

Artillery One, the United States investment firm that was poised to buy Monetas last year, says it still intends to sue the firm's creator, Johann Gevers, for alleged breach of contract.

Monetas was formed in Vancouver in 2012 by the South African businessman and was moved to Switzerland a year later where it was held up as a poster child of the nascent blockchain scene in Zug’s Crypto Valley - which he was instrumental in establishing.

Utilising distributed ledger technology, Monetas planned to provide smartphone payment services to underbanked developing economies. A deal with the Tunisian post office in 2016 appeared to herald a major breakthrough for the firm, but the plan fizzled out.

Tezos connection

Gevers’s profile was raised when he became president of the Tezos Foundation in 2017, a body that housed $232 million (CHF232 million) from a then-record “initial coin offering” crowdinvesting scheme to develop the Tezos blockchain.

But the project turned sour when Gevers fell out with Tezos creators Arthur and Kathleen Breitman. Gevers later stepped down from the Tezos Foundation.

At around the same time, Monetas’s financial problems emerged and a Zug court started bankruptcy proceedings in December 2017. At the start of last year, Artillery One stepped in with an offer to buy out Monetas, prompting the court to grant the firm a lifeline.

That deal collapsed in acrimony last summer, but swissinfo.ch understands that it did not die out completely. Since then, the courts have extended the life of Monetas several times. In January, a final deadline of April 29 was set for the ailing company to finally resolve its issues.

But before that deadline expired, the Zug court decided that enough was enough and initiated bankruptcy proceedings again.

Blame game

"It's unfortunate that we couldn't resolve our differences. Artillery One will seek our money back and damages as the result of Gevers's blatant and unexplained breach of contract," Artillery One founder Daniel P Cannon wrote in a message to swissinfo.ch. "We hope the Swiss court is fair to Americans."

Gevers was not available for comment, but last year blamed Cannon for the collapsed takeover deal. Earlier this month he wrote in a note to investors, seen by swissinfo.ch, that the liquidation process should take a year to complete.

"It is unclear at this point what consequences the liquidation of the subsidiary will have for the parent company [incorporated in Anguilla]. All the investors are invested in the parent company, which owns the assets," the note said.

Investors, who had poured more than CHF10 million into the start-up, now wait to see if they will get their money back. One group of investors, who wished to remain anonymous, wrote to swissinfo.ch:

"We're disappointed in the Swiss government for letting this drag on for so long. A lot of money has been wasted unnecessarily. Maybe shareholders would have got a better deal had there been proper execution at the company."

swissinfo.ch

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