Basis layoffs — Dec 13, 2018

Basis Stablecoin Shuts Down on Dec. 13, 2018, Cutting 100% of Workforce

Basis, the stablecoin startup formerly known as Basecoin, confirmed on Dec. 13, 2018 that it is shutting down operations and returning its remaining capital to investors. The company said it could not overcome regulatory hurdles in the United States, and the move effectively ends the project. The number of jobs cut was not disclosed, but the shutdown affected 100% of the workforce.

Basis had raised $133 million to build an algorithmic stablecoin designed to maintain price stability through supply adjustments. Founder Nader Al-Naji had previously described the system as using code to keep the token’s value stable in a way similar to how the U.S. Federal Reserve manages the dollar. The company was one of the best-funded stablecoin startups in the market at the time of the announcement.

In a blog post, Al-Naji said the company’s lawyers concluded that “there would be no way to avoid securities status for bond and share tokens (though Basis would likely be free of this characterization).” He added that the team explored other launch options, including going offshore and starting with a centralized stability mechanism, but said none were suitable. “Ultimately, however, we don't think any of the paths we considered are compelling enough for our users or our investors, or consistent enough with our vision to justify moving forward,” he wrote.

The company’s bond and share tokens were intended to expand and contract the token supply to maintain the peg, but Basis said those tokens would have been subject to rules limiting participation to accredited investors and requiring know-your-customer and anti-money laundering checks. A source familiar with the matter told CoinDesk that Basis was also constrained by the terms of its simple agreement for future tokens and conservative legal guidance.

Sources: CoinDesk