Israeli blockchain company Sirin Labs, controlled by Moshe Hogeg, controlling shareholder of the Beitar Jerusalem soccer team and chairman and founding partner of the Singulariteam group, is in advanced talks for a merger with an Israeli cybersecurity startup. If the deal goes through, it will undoubtedly lead to a change in Sirin Labs’ business focus, sources inform “Globes.”
Sirin Labs gained global attention in late 2017, when it completed one of the largest initial coin offerings (ICOs), in which $158 million was paid for its cryptocurrency. In early 2019, Sirin Labs completed development of its flagship product, the Finney smartphone, which is equipped with a secure digital wallet and other apps designed for use with cryptocurrencies. When Sirin Labs launched the device in November 2018 with a $999 price tag, the company recruited Argentinian footballer Lionel Messi to front its brand.
Like many other blockchain companies, however, Sirin Labs has suffered from reduced activity in recent years, and has made large cuts in its staff. Commenting yesterday on the negative trend in the blockchain and cryptocurrency industry over the past year, Hogeg told “Globes,” “In the cryptocurrencies field, I don’t know of a single company that hasn’t shrunk in the past year.”
Sirin Labs’ currency down 99% from its peak
Sirin Labs, founded in 2013, reported raising $255 million in financing in 2013-2017 in two rounds, in addition to its 2017 ICO. The price of the digital currency issued by the company (ticker symbol: SRN) has plunged 99% since reaching its peak in January 2018, according to figures from the CoinMarketCap website. Sirin Labs, which currently has 25 employees, laid of 15 of its 60 employees last April, as reported by “Globes,” and laid off an additional 20 since then. Nevertheless, according to Hogeg, if the merger goes through, Sirin Labs expects to increase its staff.
Hogeg confirmed yesterday to “Globes” that the merger talks had reached an advanced stage. Hogeg said that his partner in the Singulariteam group, Kazakh billionaire Kenes Rakishev, “visited Israel specially this week in order to close the deal to merge a small Israeli cybersecurity company into Sirin Labs.” If the merger materializes, Hogeg says, “It will enable Sirin Labs to expand its range of products to software, as well as hardware.”
Hogeg predicts that the deal will be finally signed within a few weeks. He said that the company with which negotiations are being held, which now has ten employees, deals in cybersecurity for organizations. If the merger goes through, the stores founded by Sirin Labs last year in London and Tokyo will continue to sell the Finney smartphone, but will engage mainly in cybersecurity. As Sirin Labs announced earlier this year, it does not plan to develop a new generation of Finney devices, and is now focusing on developing software in the sector. Meanwhile, Hogeg says, “Sirin Labs is continuing as usual, and is issuing updates of its smartphone.”
“The regulator halted the industry’s growth”
Hogeg spoke yesterday about the future of the global blockchain industry at a conference entitled, “Blockchain for Global Impact” held in Asia House in Tel Aviv. The main topic of the conference was building effective ties between civil society governmental, and private sector organizations dealing in international development and humanitarian activity on the one hand and blockchain technology experts on the other.
Speakers at the conference included Ministry of Foreign Affairs Africa Bureau head Gideon Behar, UNECE Working Party on PPPs Bureau vice-chairperson Beatrice Florence Ikilai, United Africa Blockchain Association chairwoman Yaliwe Soko, Celsius Network founding partner S. Daniel Leon, and Saga founder and chairman Ido Sadeh Man.
Following up on his remarks at the conference, Hogeg told “Globes” that in his opinion, “The US regulator halted the industry’s growth in the past year by taking measures against Facebook’s Libra project and against Telegram’s blockchain project. Regulatory approval is necessary for the industry’s growth. One of the critical things for continued growth in this field is stablecoins.
Hogeg believes that the US regulator will eventually allow an offering of Facebook’s Libra, which will give the blockchain industry a significant push.
Published by Globes, Israel business news – en.globes.co.il – on December 18, 2019
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