CryptoSolarTech has decided to return $68 million raised during its initial coin offering (ICO).
The Spanish crypto mining startup sent a letter to all its investors mentioning the move, which was shared in the public domain by the country’s IT lawyer Sergio Carrasco on February 20.
— Sergio Carrasco (@sergiocm) February 19, 2019
The mining firm planned to set up cryptocurrency mining facilities in Southern Spain. Keeping the rising electricity cost in mind, the firm decided to use solar energy for power supply in its facilities. However, it failed to get a building permit to start its operations.
In the issued letter, the founders of the project cited that the situation is beyond their control and promised to return all the funds within 60 days.
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CryptoSolarTech initiated its token sale in June 2018. The financing initiative was a huge success as the company raised around $68 million in two months. According to reports, most of the investments came from investors based in Singapore and Spain.
As seen on Coinmarketcap.com, the token backed by the Spanish company lost 85 percent of its value in the last 24 hours. Crypto analytics firm Diar, in a report released in September, also named the project as one of the top ten ICO losers.
The founders, in the letter, made it clear that the refund will be issued to investors. However, the firm will not responsible for any token purchases after February 19.
Business Expansion in Process
Despite struggling to get a building permit, the solar-based mining company was looking to expand its business. Last October, the company partnered with Chinese energy company Risen Energy to develop 300 megawatts (MW) of photovoltaic power capacity.
The Spain-based company also joined hands with Bitcoin mining manufacturer Bitfury last month to jointly start mining facilities in Paraguay. As per the announcement, the facility will cover 200,000 square meters in area and the necessary electricity will be supplied from a 500MW power substation.
However, after the recent announcement of returning investments, it is not clear whether CryptoSolarTech will continue with projects in other countries.
Can’t Escape the SEC
Meanwhile, in the US, the Securities and Exchange Commission (SEC) is busting dozens of ICOs for non-compliance with the country’s securities laws. Most recently, the regulator halted the fundraising process of Gladius Network via token sale and ordered the founders to initiate the refund process.