Breaking: Crypto Stablecoin Basis Reportedly Shutting Down
A stablecoin with some huge backers in the world of finance and technology is shutting its doors, according to a new report.
Basis, which raised $133 million from Alphabet’s venture capital arm GV, Baincapital Ventures, Andreessen Horowitz and others, is closing its doors due to regulatory issues, reports The Block. Basis plans to return most of the funds it raised.
“It is not clear exactly what regulatory agency is putting pressure on Basis. Nor is it clear the exact reason why regulators have a problem with their business model or token project.”
Unlike Tether and many other stablecoins, Basis was not designed to be pegged to the US dollar. Instead, the coin’s inflation rate was designed to be controlled by a complex blockchain-based “algorithmic central bank”.
More details on exactly why Basis has shut down are expected to be revealed within the next day.
[Update 12.15.18 According to lead investor from Bain Capital Ventures, Salil Deshpande, who appeared on Fortune’s Balancing the Ledger, Basis was unable to change its stablecoin to comply with US securities laws.]