End of the road for Basis

Stable coin project Basis is closing down and returning all capital raised to investors

Basis, a cryptocurrency stable coin project is shutting down and returning the funds to its investors because of regulatory concerns.

The project was being developed by U.S. based company Intangible Labs, aiming to create a new type of stable coin, promoted as “A stable cryptocurrency with an algorithmic central bank”.

Basis raised $133 Million back in April from high profile investors like Google’s venture (GV), Andreessen Horowitz, DHVC (Digital Horizon Capital), Raymond Tonsing, Bain Capital, Valor Capital Group etc.

It is not clear at this moment why regulatory agencies have the problem with the business model of the project.

Nader Al-Naji, chief executive of Intangible Labs, said following in a blog post:
“Unfortunately, having to apply U.S. securities regulation to the system had a serious negative impact on our ability to launch Basis.”

“As such, I am sad to share the news that we have decided to return capital to our investors. This also means, unfortunately, that the Basis project will be shutting down.”

Al-Naji continued to say: “As regulatory guidance started to trickle out over time, our lawyers came to a consensus that there would be no way to avoid securities status”.

The U.S. Securities and Exchange Commission (SEC) has been very watchful in these recent months [remember EtherDelta, Ripple, Paragon Coin] and have continuously warned that cryptocurrencies may be securities, which would make them subject to the federal securities laws.

As regulators have begun clarifying their positions and revving up policing, the way tokens are issued has undergone drastic changes. With these continued pressures from SEC, it is yet to see what future is stored for ICO’s and Cryptocurrencies.