Crypto companies hard hit by the economic impact of COVID-19 have had a plea for a 100 million Swiss franc (US$103 million) bailout rejected by Switzerland’s government.

Local news site Tages-Anzeiger reported Wednesday that Heinz Taennler, finance director of the canton of Zug, had been denied a call for assistance for local blockchain startups through a sovereign wealth fund. Taennler had planned to issue loans to local startups, which in turn could be converted into shares.

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Zug, located near Zurich, is sometimes known as “Crypto Valley” for the large number of crypto and blockchain startups that have chosen the area as their home. It offers regulatory leniency towards such firms and has become an innovation hub for blockchain technology in Europe.

Taennler had requested the funding package in April in addition to the central government’s CHF 154 million ($158.6 million) credit handout for fintech startups, saying the latter would not be sufficient to curb the economic impact of coronavirus.

Local media reported the proposed fund would have consisted of a number of different funding vehicles including private investment, federal guarantees and contributions from local government.

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Swiss blockchain and crypto firms have warned of their impending demise with private investment drying up in recent months. A survey published in April by the Swiss Blockchain Federation showed more than 160 firms would be put at risk of immediate bankruptcy should the government fail to act.

“The Crypto Valley and the entire Swiss blockchain scene face an existential danger due to the restrictions and uncertainties caused by the [coronavirus] pandemic,” the federation wrote. “Now it is a matter of helping the entire ecosystem as quickly as possible with targeted measures.”

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