Tech investor First Growth Funds (ASX:FGF) has called off a deal to put some money into speculative blockchain wannabe Zyber.

First Growth Funds made the speculative play in the dying days of December, promising $300,000 at a price of 0.8c a share, a 47 per cent discount to the price where Zyber’s (ASX:ZYB) shares had been suspended a month earlier.

It was conditional on Zyber buying a blockchain company called Equal Network.

But First Growth says the ASX has decided the acquisition will be a change of business activity so Zyber will have to re-comply with listing rules, and “as the conditions for an investment in Zyber has not been satisfied” they’ve killed the deal.

Zyber stock is still suspended and the company has not made any public announcements about either transaction outside what First Growth Funds has said.

Crypto crash-out

Zyber peaked just before the bottom fell out of the blockchain-cryptocurrency market in February 2018.

Rumours circulated for weeks that a blockchain acquisition was imminent, but the company made no comment.

Those rumours pushed the share price up 228 per cent from the end of December to January 22, when it plunged after the resignation of director Peter Wall, a partner at Perth law firm Steinepreis Paganin, from the board followed by every other director in the months after.

From tech star to penny stock

Canadian startup Zyber, founded by former Bank of America executive Clay Epstein, listed in February 2016 to considerable excitement from media and shareholders with a secure file sharing application in the very early stages of development.

But Mr Epstein had quit the CEO job by June and the replacement team was gone by the end of the year. The COO and VP of sales were out in January 2017.

By the third quarter their replacements quit too.

By late 2017 the board had effectively given up on it and were looking for a company that wanted to use it as a backdoor listing vehicle.

But after Mr Wall resigned from the company, control moved into the hands of a Queensland businessman named George Hatzipapas and his wife Argiroula, who between them owned 19.68 per cent of the company through two different entities.

Chairman Mr Hatzipapas presided over a listing on the Frankfurt stock exchange, where Zyber was listed not as Zyber but as the miner Dourado Resources that it backdoor listed into in 2016, and two acquisition attempts so far.

He also tried to revive the legacy technology.

But Zyber made just $1,913 in the half year to December 31, 2018, compared to $16,137 in the same period in 2017.

It still has $876,369 left in cash in the bank.