Bad publicity blamed as computer firm folds

A computer company founded by tech entrepreneurs from New Zealand, Israel and the United States has been placed into liquidation, with its directors blaming negative publicity about cryptocurrency and blockchain.

A first report from liquidators from October shows Tatau Limited went into liquidation following a meeting on September 30.

“Following unsuccessful attempts to sell the company’s intellectual property, the directors advise that they concluded the company should be placed into liquidation as part of an orderly wind up of its affairs,” the liquidators’ report reads.

Tatau was founded to provide a computer platform using cryptocurrency and blockchain technology to on-sell spare computer processing capacity.

Reportedly headquartered in Malta, the company operated an office in Auckland with teams also in Israel and Ukraine.

In 2018 Tatau announced the launch of a blockchain-based supercomputing platform.

The company said it used blockchain to handle transactions in a secure way, while its proprietary system guarded against fraud and ensured privacy.

However, Tatau’s directors told liquidators Tony Maginness and Jared Booth that following negative publicity over cryptocurrency and blockchain technology, it was unable to obtain sufficient customer and investor support.

Concerns have been raised about cryptocurrencies such as Bitcoin facilitating alleged dark net and illegal activity, while other criticisms include the claim that people use cryptocurrency only for speculation.

In New Zealand, cryptocurrency exchange platforms have been accused of breaching anti-money laundering laws and this year police successfully froze $140 million connected to an overseas cryptocurrency exchange.

One of the more prominent investors in Tatau, according to the NZ Companies Office, was Mark Huljich.

The film producer and son of Paul Huljich had 75,000 shares with Tatau or an allocation of 1.01 per cent.

The Huljich family featured on the 2018 NBR rich list with a net worth of $215m.

According to NZ Companies Office records, Tatau’s two directors are Epsom’s Zvi Kushnir and Mykhaylo Fridshtand, whose residential address is listed as being in San Francisco.

Tatau’s top shareholder — at 35.28 per cent — is San Francisco-based software development company Codesmart LLC. Its listed address is the same as that of Fridshtand.

Tatau’s fixed assets, meanwhile, primarily relate to computer hardware stored in Ukraine, the liquidators were told.

The liquidation is estimated to be completed within the next 12 months, the liquidators report reads.