Digital Wallet Startup Colu to Buy Back Crypto Coins It Issued During ICO

Israeli digital wallet startup Colu Technologies Ltd. is initiating a buy-back of its crypto coin Colu Local Network (CLN), first issued in early 2018 as part of an initial coin offering (ICO) that saw the company rake in $20 million. Colu announced the move Monday, saying it will be carried out through Colu DLT, the company’s Gibraltar-based subsidiary.

Colu DLT is set to acquire the entirety of tokens it issued, amounting to approximately 54 million tokens, the company said. The company did not disclose the price per token, but said it will purchase the tokens in Ethereum. Once the process is completed, Colu DLT will ‘burn’ the tokens purchased, rendering them worthless. Colu has yet to respond to Calcalist’s request for comment on the reason behind the buy-back.

Founded in 2014 and headquartered in Tel Aviv with an additional office in London, Colu uses blockchain technology to create localized digital currencies designed to encourage local spending within communities. The company launched its digital wallet, available in Tel Aviv, Haifa, East London, Belfast, and Liverpool, in early 2017. In a statement, the company said the move only pertains to the CLN issued as part of the ICO and will not impact its local currencies such as its TLV coin.

“CLN token holders placed their trust in us and became partners in building a blockchain platform. Now that we are no longer proceeding with that platform, I believe that we have an ethical responsibility towards these same partners,” Colu co-founder Amos Meiri said in a statement.