On December 13th news, according to foreign media The Block quoted informed sources reported that stable currency project Basis encountered regulatory resistance, decided to stop operations, are returned to investors before the investment funds.
Reports said it is unclear whether regulators in which to put pressure on Basis, the exact reason by regulatory pressure is not clear.
Stable currency Basis (formerly Basecoin) is a three graduate of Princeton University Nader Al-Naji, Lawrence Diao and Josh Chen to create the crypto currency company. In April 18th, Basis raised $133 million by ICO, has become one of the largest amount of financing project stable currency. Investors including Google capital, Bain Capital, Andreessen Horowitz and other well-known traditional light investment of venture capital institutions, and former Fed governor Kevin Warsh, Stanley Druckenmiller and hedge fund chiefs, also including MetaStable, Polychain, Pantera, an incubator, a well-known coin encryption assets investment institutions.
At present, the daily planet Odaliy linked to an incubator of currency related personnel, are still waiting for the reply.
Similar to pyramid pyramid schemes?
As a new stable currency underlying the Fed’s Basis through supply adjustment to stabilize the tokens in the $1 deal. According to the description of the white paper, basis issued three Tokens: the first is a stable currency, target steady at $1 Basis; second Basis is used to stabilize the price of the bond, Bond tokens; the third is constant, total dividends can obtain equity coins, Share tokens.
How to adjust the supply of token, basis to take the following methods:
When the Basis is higher than the price of $1, the system will issue Basis to equity owners, reduce the price of Basis.
When the Basis of the price below $1, the system will issue bonds at a discount repurchase Basis, trying to raise Basis price.
When the future basis back to $1, can be in the hands of bond token for $1 in exchange for basis, stimulate the investors with less than $1 for the new BASIS basis bond issuance.
But it is this adjustment mechanism, Basis so controversial. MakerDAO economist and China director Pan Chao had issued a document that Basecoin is a more dangerous than Bitconnect.
He pointed out that the former’s establishment, the latter point of view, the bond is actually Basis long futures; and Basis bond is to buy the first payment queue instead of a proportional payment purchase mechanism, means to buy bonds will spare no effort to promote other people to buy. Once the funds fracture, confidence lost, Basis will enter the death cycle, because there is no assets or any endorsement of credit, no one believes that Basis and no one to buy bonds, Basis is very easy to run on zero.
He believes that this system is very similar to run from the new capital inflows and non profits and Pyramid MLM scam.
The Basis is sent to meet regulatory pressure, inevitably reminiscent of Pan Chao pointed out that the mechanism of the risks that may exist; and selecting the treatment mode of return, did indeed look like style of dealing with us regulators.
Previously, in order to combat illegal ICO, American SEC has asked dozens of blockchain company returned to investors’ money and pay a fine.
Stable currency frequently encountered regulatory problems
In fact, despite the current bear winter atmosphere has been shrouded in encrypted currency market, but to maintain a fixed value of “stable currency” this year has become the darling of the market, the second half of this year, stable currency is ushered in explosive growth, within 30 days of 15 agencies announced the launch of currency stability.
But the prosperity of the stable money market B, is frequently cast eyes of regulators.
In December 6th last year, because there is always over, spamming, circulation and value problems such as opaque endorsement, the Commodity Futures Trading Commission (Commodity Futures Trading Commission, referred to as CFTC) in to the then largest trading volume stable currency USDT behind the team – encryption currency exchange and the release of the USDT Bitfinex Tether Ltd. company issued a summons.
In September 10th this year, the New York Financial Services Authority (NYDFS) is the first approved by the GUSD and PAX of the stable currency issue, this is a stable currency was first incorporated into the regulatory framework.
This time, many star capital favored Basis will therefore collapse? Odaily will continue to focus on the daily planet.