Blockchain

CoinLab’s venture Alydian Inc. files for Bankruptcy, Bitcoin roller coaster ride

Only yesterday we had written about Circle Internet Financial which was launched with the aim of increasing the adoption of digital currencies such as Bitcoin and that it received $9Mn in funding. On 4th November 2013, Alydian Inc a unit of CoinLab (one of the largest promoters of Bitcoin) has filed for bankruptcy protection with less than $50,000 in assets.

Bitcoin price has been moving up and down this year but in long term it has increased a lot. It was trading at $50 in March and recently it crossed the $200 mark. With a Bitcoin firm filing for bankruptcy and government seizure of $2.9Mn worth of bitcoins  on one hand, and lot of positive news on other hand, Bitcoin is certainly on a roller coaster ride.

CoinLab Inc. is a Bitcoin startup founded in 2011. The company is run by Peter J. Vessenes (CEO), Jodie Brady (CFO) and Ed Fries. CoinLab received $575k via Debt Funding in May 2012.

CoinLab had officially launched its first venture backed Bitcoin company Alydian, 3 months back to deliver Bitcoin mining solutions to customers. Their launchday pricing was $65k Terahash – unit of capacity for Bitcoin miners. CoinLab had received credibility for attracting funding from venture capitalists such as Draper Associates.

So what went wrong? Why did Alydian Inc. file for Bankruptcy? There was no comment regarding the development from either CEO or spokeswoman for the company. The court papers revealed Alydian owes $600,000 to CoinLab Inc. A debt of $3 Mn in favour of New Zealand’s XRay Holding LLC was also stated along with $40,000 to Peter Vessenes.

The above news about CoinLab's Alydian is certainly not going well with other Bitcoin incubators around the country but it could be a one off case. BitAngels is another company that operates as an incubator for Bitcoin startups. They seem to be doing well. Over 60 angel investors pumped in $6.7 Mn to establish BitAngels. The founders planned to invest this amount as $20K chunks or increments. Their website says startups that are ‘using digital currency to disrupt an existing industry’ can apply. If a startup is accepted it receives $25,000 along with 1,000 hours of monthly support from designers, developers and advisers in the community.

LTP View: Bitcoin is definitely here to stay. The currency had recently received a boost with developments such as Germany legalizing the trading of Bitcoin, Baidu’s subsidiary ‘Jiasule’ started accepting it and opening of first Bitcoin ATM in Canada. Even Andreessen-Horowitz believes that the Bitcoin could be a Huge gamer changer like the ‘Internet’. Large number of apps being created to enable people to buy, sell and trade in Bitcoins is another boost for the currency.

 

Chiraag Patel

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading& Blogging with focus on New Innovation, Technology & Startups in the Payments Space.

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