Banking Investment News

Financial services blockchain SETL gets protection from creditors

bad news

As first highlighted by CoinDesk, last Friday London fintech SETL appointed administrators. The startup which targeted financial institutions was best known for its IZNES platform for trading investment funds. IZNES is a separate company incorporated in France with a number of high profile participants including Aviva Investors, BNP Paribas Asset Management, and Lazard Freres Gestion.

A UK administration order is similar to bankruptcy in the U.S. and is a procedure to protect a company from its creditors while a rescue plan is implemented. The typical options are to secure a new backer, to sell the company or liquidate its assets.

SETL incorporated in 2015 and was one of the first to explore the use of on-chain cash for financial institutions. Hence the company name. It described its solution as “enabling market participants to move cash and assets directly between each other, facilitating the immediate and final settlement of market transactions. The SETL system maintains a permissioned distributed ledger of ownership and transaction records, simplifying the process of matching, settlement, custody, registration and transaction reporting.”

Another startup, Cobalt in which IHS Markit recently invested £4 million, used SETL technology in its first iteration before migrating away.

In October Philippe Morel was appointed as the new CEO after spending 26 years at the Boston Consulting Group. He recently spoke about the scalability of the SETL system. “We believe we have a technological lead in the blockchain for financial markets arena having demonstrated the ability to process billions of transactions a day, and to be able to service over 100 million addresses concurrently.”

Earlier this year Christian Noyer, a former Governor of the French central bank joined the board.

The latest filed accounts for 2017 showed cumulative losses of £7.37million ($9.7m). According to Crunchbase the firm raised $39 million to date.

What happens next?

The company’s board appointed Quantuma as independent administrator.

A statement was released saying: “Having made an early investment in the development of ID2S, SETL Development Ltd recognises that as an early stage technology firm it is not sufficiently placed to contribute the capital required. As such it is now now seeking to place its ID2S holding with a larger financial services firm, one better placed to provide the capital required to support the growth trajectory.”

Sir David Walker, the company’s chairman said: “Separating the software development business from the investments portfolio is a highly complex process, requiring expert, experienced and neutral management of the interests of all the creditors and stakeholders. The directors are all fully engaged and aligned in this approach.”