Sonic Zhang, the biggest shareholder in the Overstock-funded blockchain wealth management startup Bankorus has released a statement recently announcing the company has gone broke.
Writing in a statement on October 6th, Zhang said that prior deals for Bankorus had fallen through and that all of its employees have resigned.
Zhang is a huge contributor to the firm as he has invested over a million dollars into the firm. He goes onto say that he learned of the problems from its co-founder, Gregory van den Bergh, in July.
“Bankorus has run out of cash, because the second round investors pulled their funds,” Zhang wrote.
Previously known as MICAI, Banmorus attempted to launch an initial coin offering (ICO) in 2018. Just before the market for this funding method crashed.
As reported by CoinTelegraph:
“Then, tZero, Overstock’s security token platform, offered investment and a transition to a security token offering, or STO.
According to Zhang, as of early 2019, the transition was progressing successfully, but sudden teething problems drastically undermined the operation.”
In fact, all the startup has now is a $1 million investment in Lithuania’s Rato Credit Union. Sonic adds that, “and the token holders doesn’t have any legal claims over this, based on the agreements they signed.”
The debacle comes during problems for Overstock itself. Reports came out earlier in the yeat about the famous bitcoin-friendly retail giant abruptly losing its CEO Patrick Bryne around two months ago. On top of this, in September, a lawsuit alleging securities law violation added to the firm’s woes too.
It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!