The Crypto Community Isn’t Sad or Surprised By R3’s Reported Woes

Jun 8, 2018 at 20:18 UTC
Updated Jun 10, 2018 at 09:41 UTC
OPINION

Distributed ledger startup R3 is reportedly running low on cash – and judging by the social media response, the crypto-community isn’t showing much sympathy.

Fortune reported Thursday that R3 is facing a cash crunch, coming just over a year after the company announced a $107 million funding round to “bring blockchain services to the financial sector” (though per the publication, $98.2 million of that amount constituted “new money”).

Charley Cooper, a managing director for R3, “did not provide any specific figures but told Fortune that the company exceeded its revenue targets last year and will provide an update at the end of this calendar year,” according to Fortune.

R3 first launched in 2014 with the stated goal of applying the technology underpinnings of blockchain to the finance sector, culminating in the launch of their distributed ledger technology (DLT) platform Corda. Its consortium attracted a number of big-name supporters including Wall Street banks like JPMorgan and Goldman Sachs.

But R3 later ran into headwinds, losing JPMorgan and Goldman, among others, as consortium members in 2017, as reported by CoinDesk.

Fortune, citing two former employees at R3, reported that the company could be out of money by early next year even with the recently raised $107 million funds. One of them added that the number was also likely “overstated” as it “included consulting fees from prior years that R3 reclassified as equity under terms of its partner agreements.”

Yet in a tweet published Friday, R3 indicated that its finances aren’t a concern.

What the community is saying

For some observers, the reported problems represent a kind of comeuppance in light of comments from R3’s executives about bitcoin.

One observer honed in on R3’s alleged big-spending ways.

Another (perhaps only somewhat jokingly) suggested that R3’s investors would have been better off had they invested the funds in bitcoin instead.

And to this observer, the reported woes highlight the hard lessons for investors.

Photo credit: Michael del Castillo