Russell expresses regret over personal investments as leadership of Lygon sells its technology at a fraction of its value.
Lygon endeavored to optimize the procedure by eliminating the laborious task of couriering physical documents for bank guarantees, thereby achieving significant time and financial savings.
The success tale garnered substantial media attention, with articles from The Australian Financial Review and numerous trade publications shedding light on the $12.75 million successfully raised through a crowdfunding campaign.
The narrative, nevertheless, declined slightly more than a year later. Lygon appointed administrators in June 2023; the company ceased operations a few months later.
Amidst this regrettable sequence of events, an employee who not only made a personal investment but also encouraged their family to do so conveyed sorrow regarding the monetary setbacks.
Moreover, Russell, who provided information to news.com.au under anonymity, stated that a substantial financial debt was owed to the staff. Regrettably, he characterized the state of affairs as such.
The Intellectual Property of Lygon
The intellectual property (IP) of Lygon was transferred to a consortium consisting of an investment fund and former senior executives in October 2023, according to Trent Hancock, the designated liquidator of insolvency Hamilton Murphy.
Lygon’s former leadership acquired a portion of the firm’s technology for a meager $500,000, or one-tenth of its initial valuation, compared to its initial market value of $5.1 million.
Lygon was obligated to alter its business name to its Australian Business Number as a condition of the sale.
Russell conveyed his discontent regarding the transaction, highlighting the substantial dilution of the participants’ investments.
Furthermore, he was taken aback by the legal ramifications of the situation, emphasizing that the same leadership group had acquired the assets back at a significantly reduced price.
Russell revealed that family members had contributed approximately $500,000 to Lygon; however, he characterized this sum as “a drop in the ocean” in comparison to the losses suffered by other shareholders.
According to his claim, Lygon organized a fundraiser with family and friends, which amassed approximately $5 million from employees and their associates. However, the entire amount has since been lost.
Recurrent challenges in the cryptocurrency sector have been blockchain liquidation and collapse, which have had significant repercussions for creditors, investors, and the overall market.
The cryptocurrency lending platform Celsius Network, which promoted itself as a safer alternative to banks, encountered a liquidity crisis and allegations of market manipulation against its co-founder, Alex Mashinsky, in June of last year.
Securities fraud, commodities fraud, and conspiracy to manipulate the price of the Celsius token (CEL) were the charges brought against Mashinsky upon his arrest.
Nov. 9, 2023, marked the conclusion of Celsius Network’s protracted bankruptcy proceedings. The company has formulated a strategy to establish NewCo, an entity responsible for reimbursing creditors and customers.
Following the plan, which a bankruptcy court in New York sanctioned, a mining company would be utilized to repay creditors.
Two funding sources were anticipated to support the newly formed NewCo: Celsius, which held $450 million in cryptocurrency, and Fahrenheit, an investment group that obtained the authority to supervise NewCo’s mining and staking activities, contributing $50 million.