Australian Crypto Entrepreneur Lost $267 Million After Deal Collapsed Amid Crypto Market Plunges


An Australian cryptocurrency investor has lost $267 million after failing to secure funding for its Silicon Valley-based blockchain startup as the digital currency market remains in a knockout phase.

Wyre co-founder Michael Dunworth said he was “devastated” by the news last week that US online checkout company Bolt Financial Inc had abandoned its $1.5 billion deal with his company.

“I suppose the money isn’t really in the bank until it’s in the bank,” Dunworth told the Australian Financial Review on September 20.

“I try to be as realistic as possible. Otherwise you just break your own heart. But there’s the thought that I could have worked the whole 10 years for zero dollars.”

The 36-year-old did not explain why the deal was canceled. But he said times have changed.

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“Last time we had several prospects and although the market has changed I’d be surprised if that wasn’t the case now,” he said.

Dunworth also told the AFR that his company could either find another buyer or go public.

Meanwhile, San Francisco-based payments giant Bolt, which was valued at $11 billion in January, said it will continue its partnership with Wyre while remaining independent so it can focus on its core areas.

“We will continue our existing commercial partnership with Wyre to pave the way for crypto integration into our ecosystem and bring Wyre’s innovative crypto infrastructure to the world,” said Bolt’s CEO Maju Kuruvilla, Reuters reported Sept. 10.

Falling valuations in crypto companies

It takes place against the backdrop of the crypto price falling, with the market valuation in June being less than half of the $2.9 trillion it was worth in November.

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Crypto leader Bitcoin is down more than 60 percent in value since the start of this year, according to Forbes, with its current price hovering around $19,000. Ethereum’s valuation is down 64 percent, with the currency’s price remaining around $1,320.

Associate Professor Elvira Sojili noted that the opportunity cost of investing in digital currencies increases as money becomes more expensive.

“Additionally, the requirements/costs of investing elsewhere are also increasing, pushing investors to move money from the more volatile assets like crypto and stocks into safer assets like cash and bonds,” she told UNSW Newsroom on June 29 .

Eric Lim, Senior Lecturer at UNSW Business School, added that the crypto market is not disconnected from global or macroeconomic events.

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“Currently we are seeing a macro environment where all financial assets are having a bad time. In the USA, the Federal Reserve (Fed) is trying to bring about a global recession by raising interest rates. The last thing investors want to do is fight the Fed over it. That means investors will shed most financial assets and seek safer investments,” he said, reported UNSW Newsroom.

“Therefore, not only will there be selling pressure and weakness in the crypto market, but also in the financial markets in general.”

Nina Nguyen

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Nina Nguyen is a reporter based in Sydney. She covers Australian news with a focus on social, cultural and identity issues. She is fluent in Vietnamese. Contact her at [email protected]



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