Cryptobuyer Technologies, which had planned to amalgamate with Pontus Capital Corp and go public on the CSE, has canceled its move for a public listing after bank accounts related to the company in Canada and Panama were closed, against the company’s wishes.
Financial authorities in both countries have reacted to concerns over cryptocurrency exposure and the potential for money laundering by making it increasingly harder for companies in that space to keep accounts.
That has led to Cryptobuyer, which had been in good standing, losing its access to corporate banking.
Cryptobuyer currently does business as a crypto exchange that allows users to pay bills, transfer currency internationally, top up cellphone credit, and more, using their digital assets.
An email sent today from former Cryptobuyer Chairman Robert Dzisiak outlines the problems:
To the best of our knowledge we have not been exposed to any illegal activities, but the banks in both Canada and Panama do not want any exposure to this risk even though we have a very comprehensive “know your client” process.
We have exhausted our list of potential bankers and without strong and secure banking relationships in place it will be difficult to scale the business to the extent outlined in our business plan.
Also, we cannot complete a public transaction and ongoing audit protocols without proper bank accounts. While it may be possible to move to other jurisdictions, we view the risk associate with alternate, foreign banking arrangements as too great to move forward with a large public transaction.
This is not the first company in the crypto/blockchain space that has backed out of go public plans of late. Avalon Blockchain reversed a large raise a few weeks back, and returned funds raised to investors.
The companies involved in the Cryptobuyer deal, having already paid a significant amount to get so close to a listing, will not be doing same, but say they “will actively pursue alternative business opportunities with the intent of reclaiming lost shareholder value.”
“We will keep you informed as new opportunities present themselves.”
— Chris Parry
FULL DISCLOSURE: The author has purchased shares in the companies mentioned above.