Contents Protocol, a South Korean crypto startup that raised millions in ETH in its ICO, is closing its doors and paying back investors’ money.
Contents Protocol made the announcement on Wednesday, February 19. According to the announcement, the company decided to end the project because of continued regulatory uncertainties in cryptocurrency and lack of business prospect.
The company will be liquidated and remaining assets will be refunded to investors in ETH and native token of the company CPT will be destroyed. The announcement reads:
“Based on the legal opinion and advisory from law firms in Korea and Singapore, we will convert our remaining assets to ETH and distribute it on a pro rata basis to CPT holders who have requested ETH compensation until specified date. The company will go through liquidation process and the CPT we currently possess and collect through this process will be destroyed.”
According to Contents Protocol, it raised a total of 29,333.77 ETH through ICO and private token sale. The firm has around 26,878 ETH left after expenses, and will distribute these remaining asset to CPT holders. The current circulation supply of CPT is 3,193,326,669 CPT and therefore 0.000008416826443 ETH will be given for 1 CPT.
The project aimed to collect data consumer data from content platforms like WATCHA, a movie rating and recommendation app, and WATCHA PLAY, an online movie streaming service. Contents Protocol was then to reward these platforms with native token CPT. The collected would then be analyzed and sold to content providers.
But the negative perception of content providers towards cryptocurrencies was a massive roadblock for the company as the company said:
“However, there were numerous difficulties in encouraging participation from content consumers because of their negative perception toward cryptocurrency, price volatility and complex user experience. It was also a challenge to bring in content platforms who would provide data to Contents Protocol. With limited capacity in data collection, it was difficult to provide useful insight that could help content producers.”
The company further said that uncertain regulatory environment around cryptocurrencies poses so many legal and accounting risks to crypto businesses. Furthermore, the society’s perception and business environment for cryptocurrencies is not going to improve in near future.
The Contents Protocol’s team went through numerous trials and errors, but after many considerations, the company decided to shut down its services.