Australian blockchain pioneer Lygon, heralded as revolutionizing bank guarantees, has declared bankruptcy with debts hovering around $14.3 million according to reports.
Lygon launched just 5 years ago as a joint project between major Aussie banks and firms like IBM. By digitizing cumbersome paper-based bank guarantee processes via blockchain, Lygon gained huge hype. Media coverage even highlighted its $12.75M crowdfunding raise.
But the fanfare faded quickly. Appointing administrators in June 2023, Lygon fully liquidated months later. The firm’s once $5.1M valued IP sold for a mere $500,000 to a consortium including former Lygon executives.
Staff and their families lost huge sums on personal investments in Lygon, with one individual claiming his family alone sank nearly $500,000. He described the situation and financial losses as deeply disappointing.
Lygon’s crash echoes crypto lending giant Celsius Network, which marketed itself as a bank alternative before collapsing last year from a liquidity crunch and market manipulation allegations. Its lengthy bankruptcy wrapped up in November 2023.
The crypto space continues to grapple with high-profile bankruptcies and liquidations that severely harm individual investors and broader market trust. As legacy banks and institutions wade deeper into crypto, lapses raise real adoption barriers.
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