Facebook may be preparing to take on the global payments market with the launch next year of its cryptocurrency Libra coin, but closer to home the business case for cryptocurrencies, initial coin offerings and blockchain is still very uncertain.
Investment company First Growth Funds, which has been heavily involved in the crypto market, announced this week that it will restructure its business, focusing on “more established” investment opportunities.
The ASX-listed company has been offside with the exchange, which found that FGF may have breached its listing rules by making a significant change to its business.
FGF’s stated investment strategy is to invest up to 12 per cent of its funds in unlisted blockchain entities and 20 per cent in pre-ICO and ICO investments.
However, ASX says FGF is predominantly an investor in blockchain, ICO and cryptocurrency and that it breached investment limits it had previously stated.
FGF shares were suspended on April 4. All might be forgiven if FGF was making a profit but it reported a loss of $1.6 million for the December half – a significant deterioration from the previous corresponding period.
The company has responded by saying it will withdraw from a number of its agreements and MOUs. It is transferring an amount of unsold “ACU tokens” to their issuer Acudeen and will terminate the agreement between the two companies.
FGF said it had been unable to sell its ACU tokens due to a lack of liquidity in the market. It acquired them at no cost in August last year.
It is terminating an alliance agreement with Blockchain Japan Corp and a memorandum of understanding with Blockchain Global and HCash Tech. It is also terminating a token facilitation agreement with YPB Group.
The company is still involved
in a joint venture with another blockchain and crypto investor, DigitalX, and
it retains an investment in YPB Group, a digital asset token issuer.