Citing regulatory uncertainty, technical challenges and growth in non-blockchain related opportunities the company is concluding its blockchain project, the Colu Local Network (CLN), according to a statement.
As part of the scale down, the company will repurchase approximately 54 million tokens sold during its $17 million ICO from those that participated in the crowd-sale.
The CLN token, which ran on the Colu Local Network, was used as a means for retail payments and provided incentives for consumers to shop locally. The company aimed to mitigate the threats of the "retail apocalypse." It also built an app to help small businesses manage paperless transactions and help locals discover local merchants.
Colu will repurchase the tokens in ether at the original crowd-sale ETH to CLN rate, which it notes “is higher than the current market exchange ratio.” The company has set a buy-back window of 90 days, after which the tokens will be burned.
The company plans to create a website dedicated for the repurchase. It also says holders in several companies will be excluded, including those in the United States and Canada. Additionally, only those who complete KYC and AML processes will receive repayment.
Culo recently launched the Belfast Coin, in partnership with Belfast City Council, and coin for use in the Municipality of Tel Aviv-Yafo. Neither project is blockchain-based and both will continue to operate.
“The Colu Group is also in talks with a number of other municipalities across the world, about introducing similar initiatives,” according to a statement.
Colu DLT’s Chairman of the Board of Directors, Amos Meiri, said “blockchain may yet help to” build trust between people and foster local economies.
Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Colu.
Coins image via CoinDesk archives
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. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.