Deep into the red, DigitalX says ICOs aren’t done yet and STOs are the future
Crypto advisors DigitalX (ASX:DCC) have had a lamentable first half of the 2019 financial year, plummeting into the red as interest in initial coin offerings (ICOs) and token advisory experiences a downturn.
Exactly a year ago the company was reporting an impressive $10.4 million half-year profit; this year it put out its half-yearly report after the market closed on Thursday and it contained a $5.9 million loss.
Revenue also fell considerably, tanking 78 per cent to $1.1 million, from $5 million the year before.
In accompanying commentary, DigitalX said the downturn was due to “lower revenues from token advisory which is consistent with the overall market trend for crypto assets”.
It said ICO funding had “slowed considerably” in the last six months, but believed that was “short-term sentiment”.
To mitigate the issue, DigitalX said it was pivoting towards the “evolving” security token offering (STO) market.
“We are delighted to see the market maturing with high profile STO exchanges such as Open Finance and tZero now coming online to provide secondary trading of STOs over 2019 calendar year,” it said.
DigitalX is currently locked in a court battle with a consortium of parties who are suing it for misleading or deceptive conduct over the ICO of a blockchain medtech company called Shivom on which DigitalX was an advisor.
DigitalX and the parties are scheduled to meet in court on March 27 for mediation.