Startup Colu plans to cut off its blockchain business, Colu DLT.
In its statement, the company said it is ending its blockchain project, the Colu Local Network (CLN), due to regulatory uncertainty, technical challenges and opportunities related to non-blockchain.
The company announced that it would repurchase participants to approximately 54 million tokens sold during the ICO period, when it raised $17 million. It is reported that the major buyers of CLN have agreed to the company's repurchase and burnout plans.
CLN tokens running on the Colu Local Network are used as retail payment methods and provide incentives for consumers to shop locally. The company has also developed an app that helps small businesses manage paperless transactions and help locals search for local businesses.
The company launched the token project in four cities including London, Liverpool and Tel Aviv. In addition, the company received $14.5 million in financing from the financial and insurance company IDB Group.
Colu will use the original ICO price to repurchase CLN in Taifang, which states that the price is “higher than the current market exchange rate”. The company set a 90-day repurchase period, after which the tokens will be destroyed.
The company plans to create a website specifically for repurchase. The company's holders in the US and Canada will not be able to participate in the repurchase. In addition, only those who complete the KYC and AML processes will receive funding.
Colu DLT's parent company, Colu Group, will continue to operate, focusing on the use of “city currencies” to promote social and economic development within the city (similar to points), but points out that these projects are not based on blockchain technology.
Colu recently launched Belfast Coin in partnership with the Belfast City Council, and launched similar currencies in two cities in Israel, but neither project is based on a blockchain and will continue to operate.
The statement states:
“The Colu Group is also communicating with similar initiatives in other cities around the world.”
Dan Ariely, professor of behavioral economics, said:
“The decision of Colu DLT to repurchase CLN tokens seems to be unprecedented in the industry. This represents Colu's core values. The Colu Group is committed to promoting relationships between municipalities, local businesses, residents and other city stakeholders. Depending on the exact same trust and reliability, this is what CLN token holders see. It's great to see that Colu follows their ethical standards not only in speech but also in action. If we want the technology industry Continue to grow and develop, this kind of abandonment of profits for the benefit of customers, partners and investors is critical to the industry."
The startup company Colu was established earlier and was the first to receive financing in 2015. At the time, Colu called Bitcoin 2.0, which was able to integrate multiple services and applications, allowing people to buy and store merchandise on the blockchain. The founder has also tried the concept of colored coins.