Korean ICO Project Shuts Down, Says 'Negative Perceptions' of Crypto Made Business Impossible

An $8 million ICO project is shutting down, citing regulatory uncertainty and difficulties in onboarding new users.

Content-sharing platform Contents Protocol announced Wednesday that following numerous attempts to turn its business into a success, the firm is closing down and refunding investors as much as $7.5 million-worth of the ether raised in its initial coin offering.

"We inform you that due to continued regulatory uncertainties in cryptocurrency and lack of business prospects, we have decided to end our project," reads an announcement that has replaced Contents Protocol's website.

Contents Protocol was a relative latecomer to the ICO boom, only completing its crowd sale in December 2018.

It was created as a subsidiary of WATCHA Play, a popular Korean streaming service, and was designed to incentivize content sharing by effectively rewarding users who rated and reviewed films and TV featured on the platform with its native CPT token.

"The main thing that the blockchain allows us to do is ... compensate a new participant [users] who really provide free marketing for the content," said John Kim, Contents Protocol's global business developer, in an interview with Ran NeuNer for CNBC, back in May 2018.The project aimed to become profitable by processing and analyzing sharing data, which could subsequently be sold back to content providers to inform them on which movies and TV series should be featured on their platforms.

In Wednesday's announcement, Contents Protocol complained that few consumers wanted to use the platform because of the "Negative perception toward cryptocurrency, price volatility and complex user experience."

Without a strong user base, it also made it difficult to encourage other content providers to provide data for the platform, limiting any possible insights that could be subsequently sold back to platforms.

Contents Protocol raised 29,333 ETH in its private and public ICOs in 2018.

According to Contents Protocol's asset records, around 3,800 ETH was exchanged into $1.45 million to fund business operations.