Blockchain startup Colu is eliminating blockchain from its business plan.
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.
Dan Ariely, professor of behavioral economics, told Crowdfund Insider:
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.
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