The boss of Fetch.ai has sought to allay investor concerns after the firm’s UK business was put into administration over “financial difficulties” following a million-dollar London court case.
In an interview with the Standard, founder Humayun Sheikh insisted it was “business as usual” for the tech firm and creator of the FET cryptocurrency as he outlined plans to restructure as part of a shift in operations from the UK to Dubai.
Fetch.ai’s UK entity was put into administration earlier this month, the Standard revealed yesterday, after company filings suggested it was in “financial difficulties” and its directors believed it was “likely to become unable to pay its debts.”
Administration proceedings for the firm first began on 24 November last year, a week after the company lost a High Court case in London in which it was ordered to pay just under £1 million plus interest to settle a claim made against it by a former contractor. The claim included around $750,000 in connection with unpaid FET tokens as part of a software deal.
After being put in administration, the UK firm was bought back by Sheikh last week via a new UK entity known as Assmbl.ai, according to advisors ReSolve who said they were tasked “to find urgent rescue capital or to secure a sale” and that Assmbl put forward “the best offer.” Another UK entity, also owned by Mr Sheikh, called ‘Fetch.ai 2024’ was established the following day. The FET crypto tokens are operated by a company based in Singapore and are not directly impacted by the UK administration, Fetch.ai said.
Sheikh said the UK entity existed primarily to conduct transactions on behalf of the Singapore business as well as to hold the group’s intellectual property. He said the firm was lent money to operate and owed him several million pounds. He could not guarantee that the sum demanded by the London court would be paid in full, adding that it was now up to independent administrators to decide how best to distribute funds.
He told the Standard: “I withdrew support because I don’t feel the community needs to pay the legal fee.
“Fetch [UK] does not have the money – because it was running on borrowed money. The company is expected to [comply with the court order] but it doesn’t have the money.
"I have paid into the administrator £2.5 million personally. It will be distributed to all the creditors and whatever the administrator decides, they will pay. What I have bought is all the IP and the assets of the company…there is no avoidance here.”
As much as the government is saying ‘come here and operate here’ the environment is not good.
He said that the creation of the new UK firm, Fetch.ai 2024, was to transfer the IP and assets he had bought from the former UK entity after its administration, and that it would shortly be renamed “Fetch.ai”. He said there would be no interruption to trading of the Fetch business during this process.
Sheikh said the shift in operations to Dubai, which began prior to the conclusion of the court case, was because the UK regulatory framework on cryptocurrencies “was still not clear and the banking system was hesitant around crypto,” adding that Barclays had closed down the firm’s account.
“If somebody knows that you are in crypto, you are going to have your bank account closed. As much as the government is saying ‘come here and operate here’ the environment is not good.
“The AI uptake and the ability to commercialise AI is very acceptable in the Middle East at the moment and they are offering us support.”
FET, the Fetch.ai crypto token, has a market cap of more than half a billion dollars and around $50 million in daily trading volume according to CoinMarketCap. It was launched by the founders of the business in 2017 and “powers its internal economy” with “Fetch.ai users spending FET to consume services within the platform.”
The FET price has fallen around 7% since yesterday, wiping close to $50 million from the cryptocurrency’s market cap.
Fetch.ai offers a platform for users to build autonomous agents, or ‘digital twins’ to interact and transact within a range of online apps and services.
According to an explainer by the company, Fetch.ai users spend FET to “consume services within the platform…for example, instead of searching for and booking a flight via a price comparison website, you’d use Fetch.ai to automate the task.”
Users also stake their own FET for the opportunity to have a say in the governance and direction of the Fetch.ai platform, according to the explainer. Users who stake their FET earn interest at a variable interest rate of 10% annually.
Founder Humayun Sheikh is a Cambridge-based entrepreneur and founding investor of DeepMind, which is now owned by Google.
