modum.io (B): Bidding Farewell to Crypto

After a successful initial coin offering (ICO) in the fall of 2017, the Switzerland-based supply chain technology company modum.io began trading its MOD token on various exchanges. The financial resources generated from the token sale set up the modum.io team to focus on operations, launch the company’s product, increase revenue, onboard new customers, and hire new staff.

In the course of the cryptocurrency bear market of 2018–2019, however, the value of the MOD token deteriorated to the point where it was delisted from major exchanges. Mainly caused by the lack of regulatory compliance of security tokens on the exchanges, these delistings partially killed the liquidity of the MOD token. In light of market and regulatory developments, and with external pressure increasing, modum.io scrambled to identify alternatives to solve its predicament. In 2019, cofounder Marc Degen and his partners decided to elaborate different options in order to secure the future of modum.io while simultaneously offering a satisfactory solution for all stakeholders.

In their discussions, they saw three potential paths forward from which they must choose: (1) continue as is, (2) convert outstanding tokens into some form of company equity, or (3) liquidate the company and distribute the proceeds to the share- and tokenholders. Because this decision was strategically crucial for the future of modum.io, the board of directors did not want to rush to a conclusion; they preferred to thoroughly review the benefits and pitfalls of each option.