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

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

CoinDesk Insights
Jun 8, 2018 at 8:18 p.m. UTC
Updated Sep 13, 2021 at 8:02 a.m. UTC

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.

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.

— R3 (@inside_r3) June 8, 2018

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.

These are the guys who said "No Blockchain, because we don't need one"

Again and again, the legacy banking and corporate world will fail to understand Bitcoin's fundamental value proposition.https://t.co/F5XVNcewdA

— Beautyon (@Beautyon_) June 7, 2018

— Dan McArdle (@robustus) June 7, 2018

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

— TplusZero (@TplusZero) June 8, 2018

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

— girevik (@girevikcap) June 7, 2018

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

Investors learning the hard way to be skeptical of hand-wavy blockchain hype.https://t.co/Tn6PithFeZ

— Stephen ⚡️ (@sthenc) June 7, 2018

Photo credit: Michael del Castillo

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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