From: "ama-gi ISPI"
Subject: IP: ISPI Clips 6.14: Anonymous eCash Provider-DigiCash-Files Chapter 11
Date: Fri, 6 Nov 1998 00:19:06 -0800
To:
ISPI Clips 6.14: Anonymous eCash Provider-DigiCash-Files Chapter 11
News & Info from the Institute for the Study of Privacy Issues (ISPI)
Friday November 6, 1998
ISPI4Privacy@ama-gi.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This From: CNET News.com, November 4, 1998
http://www.news.com
DigiCash Files Chapter 11
http://www.news.com/News/Item/0,4,28360,00.html?st.ne.4.head
By
Tim Clark, timc@cnet.com
Staff Writer, CNET News.com
Electronic-cash pioneer DigiCash [ http://www.digicash.com/ ] said today
it's filing for Chapter 11 bankruptcy protection after shrinking its
payroll to about six people from nearly 50 in February.
The company, which has been running off a bridge loan from its venture
capital investors since June, is seeking new investors from established
financial institutions or a buyer for its software technology. The
company's operations in the Netherlands, where it was founded, were
liquidated in September.
"To really launch and brand something like this in the Internet space is
likely to take a fair amount more capital," said Scott Loftesness,
DigiCash's interim CEO since August. "It's more appropriate for strategic
investors, corporate players or banks themselves as a consortium model."
Electronic-cash schemes have found difficult sledding recently. First
Virtual Holdings
[ http://www.firstvirtual.com/ ], which had a form of e-cash, exited the
business in July. CyberCash's [ http://www.cybercash.com/ ] CyberCoin
offering hasn't really caught on. Digital Equipment, now part of Compaq
Computer [ http://www.compaq.com/ ] is testing its Millicent electronic
cash, and IBM [ http://www.ibm.com/ ] is in early trials for a product
called Minipay.
Under bankruptcy laws, DigiCash's Chapter 11 filing allows the company to
continue operations, while keeping its creditors at bay as the company
reorganizes. Most of DigiCash's $4 million in debt is owed to its initial
venture capital financiers who extended the bridge loan, August Capital
http://www.augustcap.com/ ], Applied Technology, and Dutch investment firm
Gilde Investment.
DigiCash's eCash allows consumers to make anonymous payments of any
amount--and anonymity differentiates eCash against other e-cash schemes.
DigiCash's intellectual property assets include patents, protocols, and
software systems that also could be used for applications, like online
electronic voting or private scrip issued by a particular retailer.
DigiCash suffered a setback in September when the only U.S. bank offering
its scheme, Mark Twain Bank, dropped the offering. But a number of major
banks in Europe and Australia offer or are testing DigiCash's electronic
cash.
Also in September, DigiCash closed its Dutch operations and liquidated its
assets there.
Loftesness said DigiCash has a list of 35-40 potential partners, and he has
been talking to players like IBM for months. He expects to resolve
DigiCash's status in the next five months.
"Everybody feels anonymous e-cash is inevitable, but the existing situation
was not going to get there from here," said Loftesness, who is frustrated
by potential partners telling him, "This is absolutely strategic, but
unfortunately it's not urgent."
The company was founded by David Chaum and was well-known in the Internet's
earliest days. MIT Media Labs' Nicholas Negroponte is a director of
DigiCash.
Copyright © 1995-98 CNET, Inc.
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