Token Foundry set out last year to be the best platform for running initial coin offerings.

The website of the ConsenSys-incubated startup said as much until as recently as January 21. Then, over the next few days, it would articulate two more missions before finally settling on a new goal: “This year we are adding new ways to conduct cryptocommerce.”

But, as three sources with knowledge of the situation tell CoinDesk, Token Foundry isn’t likely to deliver on any mission at all, saying it’s essentially a ghost ship at this point.

Jay Thakrar, the head of operations for both Token Foundry and ConsenSys Digital Securities, disputes that assessment.

“Token Foundry has not shut down,” Thakrar told CoinDesk in an email. “The information you have received is not correct.”

Thakrar wrote in a follow-up message:

“Token Foundry is focused on building sustainable decentralized networks and enabling purchasers to safely buy vetted tokens. … We learned that there is a long tail market of potential purchasers that do not know how to participate in the Web 3.0 world, and as a result, we are building additional software to help responsibly bridge that gap.”

Observers have questioned the fate of the company since founder and CEO Harrison Hines left ConsenSys in August 2018, just four months after Token Foundry debuted. Hines now runs a company called Terminal Systems, which employs at least five other ConsenSys alums, according to LinkedIn.

“There’s no one left at Token Foundry – anyone still employed under that banner actually works on ConsenSys Digital Securities,” a person with knowledge of the situation told CoinDesk on the condition of anonymity. “They just haven’t killed the brand yet because it’ll be a bad look.”

For his part, Hines told CoinDesk in a text message: “Having a good founder/leader who is passionate about the vision and the mission is critical to a startup’s success and keeping the team motivated and together.”

Perhaps alluding to ConsenSys founder Joseph Lubin, who reportedly owns the large majority of each of the venture studio’s startups, Hines added:

“I’ll never start a company again that someone else has control of.”

Revenue driver?

Token Foundry launched in April 2018, and by summer Lubin was painting the “spoke” as a standout success.

At an event in Brooklyn on August 20, CoinFund founder Jake Brukhman pressed Lubin in an on-stage interview to share which of ConsenSys’ 50 projects were making money. Lubin named Token Foundry as one of only two mentioned as strong revenue generators.

“The company projected revenue of $50 to $100 million for 2018,” a source told CoinDesk. “Based on the sales that they did raise, that is very unlikely.”

The old Token Foundry site shows four finished sales, though only three successfully made it to the finish line. Dether, which allowed physical shops to sell cryptocurrencies, raised $13.4 million in February 2018. Gambling startup Virtue Poker raised $18.5 million in May. Then a protocol for improving location services, FOAM, raised $16.5 million August. Finally, media startup Civil failed to reach its soft cap, returning all contributions (most of which came from ConsenSys itself) to participating investors.

Like any service provider, Token Foundry would have only earned a small fraction of any of the sales. The pace did not appear to be enough to justify its staffing, based on subsequent news.

The spoke let go of seven people in November, according to The Block, to whom Thakrar said: “We are expanding our offerings and will continually reassess our positioning to ensure Token Foundry’s future success in this dynamic space.”

Thakrar sent nearly the exact same message to CoinDesk later that month, adding: “Our goal remains the same: connecting platforms with existing participants that will add the most value to a given network, lessening the barriers for well-seasoned participants, and building incentives for new participants.”

Meanwhile, a broader contraction was underway at ConsenSys, as CoinDesk reported in December. It’s unknown whether the cuts associated with Lubin’s vision for “ConsenSys 2.0” further shrunk Token Foundry, but another source with knowledge of the company said that most of the original members of the team are either gone or looking for a way out.

Shifting mission

Those that remain with the project may be steering it toward the token economy’s latest point of focus: security tokens.

ConsenSys Digital Securities is a part of Token Foundry, according to FINRA, the financial industry’s self-regulatory body.

FINRA shows CDS licensed as a broker-dealer, that is, a company that deals in registered securities. This is an important distinction, because last year in advance of the token sale for Civil, ConsenSys and Token Foundry were strongly pushing the message that “consumer tokens” could dodge securities law.

That proposition was not tested, at least not on Token Foundry’s watch, as the Civil sale failed last October. Civil’s new offering will eschew Token Foundry entirely.

The transition of Token Foundry to something more in line with typical securities law is reflected in the various versions of the project’s new website.

Late last month, its home page still expressed the original mission of the project, with the following tag line: “Token Foundry is a global platform for everyone to safely buy vetted tokens.”

Days later, with a complete redesign, the text sounded more like a venture capital firm: “Token Foundry partners with ambitious startups and enterprises who are building infrastructure and apps for Web 3.0.”

Then, by the following Monday, it had a third message that seemed to hew closer to the original: “Last year, Token Foundry became the standard for issuing and purchasing well designed tokens. This year we are adding new ways to conduct cryptocommerce, from subscriptions to token issuance.”

But according to Thakrar, CDS is just part of the larger token strategy at ConsenSys. He described it as a discrete team working to “build both the primary and secondary markets for tokenized assets.”

Leigh Cuen contributed reporting.

Update: This report has been updated to reflect that Jay Thakrar’s job title is head of operations, not chief operating officer.

ConsenSys founder Joseph Lubin and CoinFund founder Jake Brukhman speak at the VC firm’s BlockParty event in August 2018. (Photo by Brady Dale for CoinDesk)