Sirin Labs, founders of the Finney blockchain phone are making 15 of their 60-person team redundant, as crypto winter bites back with sales of its flagship device “less than expected”.
The market may be showing some positive signs as bitcoin, ethereum and others made strong gains in April, but the bear market continues to show its teeth, claiming the scalp of another start-up.
Sirin Labs, founded by Israeli businessman Moshe Hogeg, first announced the $1,000 smartphone back in July. To much fanfare they claimed it was the world’s first ‘blockchain-powered’ handset, with one of its main selling points being it featured an embedded cold storage wallet.
The aim was for people to use the phone’s internal exchange to swap tokens without having the hassle of switching tokens from wallet to exchange and back to another wallet, but despite the hype (and backing from Barcelona soccer superstar Lionel Messi) no-one was buying it, Globes reports, and the company had to cut costs.
Embarassingly, Sirin Labs was forced to deny media reports it had failed to pay its employees’ salaries, with Hogeg telling Globes:
The global market is not in the best state. The company gives some of its work to outsourcing, and plans to focus on development and distribution of the software … Sales are not what we expected.”
On top of this, Hogeg faces a number of legal actions around the world, most recently in California, where a $50-million lawsuit has reportedly been filed over allegations he and business partners conned investors out of hundreds of millions of dollars.
Another ICO bites the dust
In the good old days of the last bull market, Sirin Labs managed to raise $158 million in an initial coin offering. Combined with an additional $97 million it had raised, you would expect a $255 million war chest would put it in a strong position. But it was not to be.
Better sell your SRN asap. https://t.co/twbhGztDNl
— Τζον Σκιβερ (@100THS3) April 16, 2019
The value of its $SRN token, the digital asset issued by Sirin, has plunged more than 99% to just over three cents, from its peak in January 2018 when it was valued at $3,48 per token.
Its market cap is now $16.8 million from a high of $344 million, and its struggling to turn significant daily volume in the markets.
Told you so
You would have thought they had learnt their lesson, unfortunately the company has previous experience when it comes to launching overpriced devices nobody wants.
Back in 2016, Sirin Labs launched the $16,000 Solarin smartphone (yes, you did read that correctly) at a star-studded party attended by Leonardo DiCaprio and Tom Hardy. Billed as an ultra secure phone, it too bombed. Who’d have guessed?
What went wrong?
It appears Sirin Labs has massively misjudged the market for a $1,000 blockchain phone and the impact of the current downtrend in the cryptocurrency space.
Plus, the company faced tough competition from the tech world’s established smartphone manufacturers, Apple and Samsung, with both companies in a dominant position and the latter recently launching its Galaxy S10 model which features a built in cryptocurrency wallet.