The cryptocurrency startup Zwoop, that was backed by the billionaire investor Robert Friedland, has gone into administration. The information was released in a recent report by The Telegraph on January 11.
Apparently, the company has filed for administration at the end of November 2018 and employees and suppliers from all over the world have been left with unpaid wages. As The Next Web explains, the company owes a London-based marketing agency £42,000 and a public relations firm £30,000.
Alessandro Gadotti is the founder of Zwoop that aimed at using artificial intelligence and other technologies to gather information from e-commerce sites and find the best possible prices for products. Zwoop received $13 million from Robert Friedland, the founder of Ivanhoe Capital Corporation and Ivanhoe Mines.
According to The Next Web, the company wanted to raise $30 million through a token sale. The report says that when they’ve delayed the ICO, Gadotti quit the company and an employee found $2 million worth of payments that were not able to be accounted for. The company was also employing 56 people in London, Singapore and Hong Kong.
Gadotti said that they did not misuse the funds that the company received and that the $2 million dollars could have been used to help the company grow.
The Initial Coin Offering was announced back in August to take place in Septemeber. However, the ICO was suspended a few days before the official sale.
Important Pre-Sale Update: Zwoop’s ICO is currently suspended until further notice due to updated legal opinion. Find out more here: https://t.co/lpIFlRHdhf or ask any questions on our Telegram channel: https://t.co/0YmS3Iyd8k #ICO #announcement #presale pic.twitter.com/sNMF79XcLJ
— Zwoop (@ZwoopGlobal) September 18, 2018
As per The Next Web, employees and freelancers working on the compan
y were concerned about the slow pace of development of Zwoop and its application. However, Gadotti was convinced that the app was going to be released soon.
Zwoop employees and Ivanhoe Capital confronted Gadotti shortly after this situation. As mentioned before, Gadotti explained that the company was making legitimate payments.
During 2017 and 2018, several ICOs were launched. However, some of them were simply scams or fraudulent companies that wanted to steal investors’ funds. This is why regulatory agencies around the world started to play a more active role in regulating the crypto and blockchain market.
Clearly, this is not the first time that an ICO fails and closes its doors as Zwoop did.