The Impact of the Crypto Bear Market: Projects Forced to Shut Down
The cryptocurrency industry is currently experiencing a bear market, causing several projects to face significant challenges and ultimately close their operations.
LBRY, a decentralized content-sharing and publishing platform, is the latest casualty of the market downturn. The company behind the LBRY blockchain recently announced its inability to continue due to various financial obligations.
In a solemn statement, LBRY acknowledged its defeat against the US Securities and Exchange Commission (SEC) and revealed its inability to repay its debts. As a result, LBRY’s assets, including Odysee, are now under receivership.
All executives, employees, and board members of LBRY have resigned, although they remain committed to fulfilling their legal obligations. However, they will no longer be involved in the company beyond these requirements.
There is now a concern that the LBRY blockchain, which relies on decentralization, may also cease to exist.
“Decentralization isn’t magic – it only works if enough people use it. Could LBRY still fulfill its original purpose of revolutionizing digital publishing? Could this be the beginning of its decline? No one knows for sure. We aren’t LBRY experts,”
LBRY has decided not to appeal the SEC’s judgment.
Previously, the blockchain company had announced its plans to wind down operations in July after the final SEC judgment. Initially, the regulator intended to impose a penalty of $22 million, but due to LBRY’s financial constraints, the amount was reduced to $111,000.
In September, LBRY filed an appeal challenging the SEC’s verdict in the United States Court of Appeals for the Second Circuit, claiming that the judgment was flawed.
Other Projects Succumb to the Bear Market
SuperDao, a platform supporting community-driven decentralized autonomous organizations (DAOs), recently announced its decision to halt operations and refund remaining funds. The lack of profitability was cited as the main reason behind this choice.
In its 2021 seed round, SuperDao secured $10.5 million in funding from notable backers such as SignalFire, Circle, and One Block Capital. The company initially aimed to secure advertising space during the 2022 Super Bowl but was surpassed by competitors like FTX and Crypto.com who secured multi-million dollar deals ahead of them.
Yield Protocol, a decentralized finance platform, also made the difficult decision to shut down due to low demand and regulatory obstacles. After extensive discussions with stakeholders, the team concluded that sustaining operations was no longer feasible.
NFT platform RECUR also became a victim of the bear market, closing its doors despite raising $50 million in an investment round nearly two years ago.
The unfavorable market conditions and financial challenges forced Nifty’s, a platform dedicated to Web3 creators, to wind down operations in August. Despite shifting its focus towards developing a platform for Web3 creators and actively seeking funding, the company was unable to secure the necessary capital.
These closures reflect the difficulties faced by various projects in the current crypto bear market.
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