For those working towards creating a new token or cryptocurrency, there may be indeed a possibility when your project fails and you have to deal with the consequences of such a situation. We understand that the failure of a project can be a very tense situation and it is an unfortunate condition. But, it is essential that you keep it in your stride and now move towards a clean closure based on the knowledge that a surprisingly large number of cryptocurrency projects fail either due to technical issues or commercial considerations.
Keeping in mind the factor that now the project needs a closure that will ensure a clean break for all involved it is best that instead of sitting over the failure you accept the situation and move ahead to chart the path ahead. At this point, it is also essential that you keep your team together and take collective decisions and stand behind a common decision. This will prevent any unforeseen situations where commitments from any team members create problems later.
As a preliminary step, you will have to deal with the immediate backlash which may have arisen out of the declaration that your project could not succeed in its targets. The backlash may surprise you and your team and disorient your team, but it must be dealt with in a calm and composed manner wherein you refrain from making any statements that have not been vetted by legal professionals.
This brings us to the second key step in the process, that is, getting in touch with your lawyers immediately and ensuring that you are legally compliant. It is also of immense importance that you and your team are aware of all the steps being taken by your legal consultants. You and your team must always maintain a common point of contact and ensure that all persons in the team provide a unified front.
Now while your lawyers are working on the potential options that you can take, they will ask for financial records of your organization. It is therefore key that you maintain proper records of any transactions conducted by your organization and that they are also accessible while required. If you do not have any records on your own, ensure that you obtain them from your team and provide them to your lawyers and accountants as they need to have the most detailed and comprehensive information possible to provide you with the best options.
A clear compilation of your financial data will provide a complete picture of the financial conditions of your company and the liabilities which the organization may have to repay. At this stage along with other activities, it is also essential that you determine if you have to report the situation of your organization to any government bodies.
You must ensure that you provide an adequate amount of time to your lawyers and accountants to come up with the options. Once the options are provided to you, the ball is back in your court and no you have to understand them.
While evaluating the options, you must understand the consequences of selecting an option. This primarily involves understanding the liabilities and losses that you may have to personally incur and if it will disqualify you for any future activities. For example, in certain countries promoters linked to unsuccessful financial services businesses are disqualified from financial businesses for a definite number of years.
It is also critical that you identify all the critical parties which will be affected by any option that you choose. Any option that does not keep in mind the interests of key stakeholders such as token buyers may be impractical to implement and may not be able to provide you the much-needed clean break.
An option that many people choose is to let their accounting and legal professionals make critical decisions on their behalf. This may also be a possible option based on discussions.
At this juncture, it may be possible that an option that your legal professionals may recommend is that the organization moves for corporate insolvency process under the laws of the country where it is incorporated or operating. Successful completion of corporate insolvency proceedings generally provides a clean break and closure of all pending proceedings.