Basis Stablecoin Leaves the Market Due to Tight Regulation
Basis Stablecoin, that wanted to become the Federal Reserve for the crypto market, decided to cease operations. The main reason is tight regulation.
A crypto project Basis conducted an ICO this spring. It managed to raise $133 million to create algorithmic stablecoin, which would have to become the Fed for the crypto market. Among the investors were such sharks as Bain Capital Ventures, Lightspeed Ventures, GV and Andreessen Horowitz.
Now Basis has announced the closure of the project. Such a decision was made by the project due to an unfavorable regulatory atmosphere. According to the founder of Basis Nader Al-Naji, share tokens of the project, which should maintain a stable price, are considered by the regulator as securities. Accordingly, only accredited investors, who passed KYC and AML checks, can buy them. It makes the product uncompetitive.
Nader Al-Naji argues that Basis considered several options for circumventing regulation. But at the end of the day, the project decided to leave the market, as it failed to achieve a balance between innovation and legislation. All raised money will be returned to investors.