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Fetch.ai’s Insolvency: How the AI Company Rose From the Brink of Bankruptcy to All-Time High

Published March 7, 2024 2:03 PM
James Morales
Published March 7, 2024 2:03 PM

Key Takeaways

  • Fetch.ai’s utility token FET has doubled in price in the last 7 days.
  • However, the company behind the token recently entered into administration.
  • Following reports that it was in financial difficulty, Fetch.ai reassured customers that its global business remained solvent.

Boosted by rising interest in AI tokens, FET has more than doubled in price throughout the last week. 

The latest rally couldn’t come at a better time for the company behind the token, Fetch.ai, which entered administration in January after running into financial difficulties. 

How Fetch.ai Averted a Crisis

When Fetch.ai entered  administration on January 23, it engaged the financial advisory firm ReSolve to “find urgent rescue capital” and implement an appropriate restructuring.

According to ReSolve, Fetch.ai ran into financial difficulties toward the end of 2023 but averted bankruptcy after being bought out by an associated entity – Asembl.ai.

“After a wide marketing campaign, we are pleased to have achieved a sale of the business and assets of Fetch.AI, which is in the best interests of the creditors,” commented  Ben Woodthorpe, Partner at ReSolve and Joint Administrator in the case.

He added that “with the rapid developments currently taking place in the world of artificial intelligence, there is great scope for the business to thrive over the coming years.”

Fetch.ai Reaffirms its Global Stability

After the Evening Standard reported that Fetch.ai had entered administration, the company stepped in to reassure customers that the business was still sound.

According to Fetch.ai, the Standard’s report overstated Fetch.ai’s financial struggles. Denying that the administration process was a sign of instability, the firm suggested it was a natural part of its global restructuring, which will see its UK operations relocated to Dubai.

The company went on to accuse the Standard of “failing to note that the brand’s global entities remained unaffected,” adding that the relocation of the UK company “had been mistaken as a depletion of assets.”

Meanwhile, CEO Humayun Sheikh stated:

“As founder of Fetch.ai, I’d like to reiterate that recent changes signify the successful completion of our token distribution commitments. The relocation of HQ  to Dubai is procedural, not a shift in dedication.

“This transition impacts only the U.K. administrative entity, while our global operations remain robust,” he added.

What Does Fetch.ai Restructuring Mean For FET

While the market value of FET initially fell on the news of Fetch.ai entering administration, the token soon rebounded.

Since the beginning of February, the price of FET has exploded, smashing through its previous all-time high of $0.94 to achieve a new record of $2.84 on Wednesday, March 7.

It is important to note that the UK-based company operates independently from the Fetch.ai Foundation –  a non-profit organization based in the Netherlands.

Fetch.ai’s founders own 20% of the total FET supply between them. Meanwhile, 20% is held by the Foundation, 17.6 % was sold in an initial token offering, 10% was distributed to advisors and the remaining supply is reserved for staking rewards and future releases.

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