Spacemesh developer Unruly Technologies files for insolvency
Israeli crypto startup collapses after token plunges 1,750% in value.
Unruly Technologies, a company specializing in blockchain technology and digital currencies, has filed a request with the Tel Aviv District Court to initiate insolvency proceedings due to severe financial difficulties.
The company, which developed the blockchain platform behind the digital currency Spacemesh, sought to offer an alternative to Bitcoin’s consensus mechanism. Its vision centered on creating an open and accessible system that would enable any user to become a miner. Since its founding, Unruly has raised $24.5 million from investors.
According to the court filing—submitted by attorneys Karen Reichbach Segal, Guy Ido, and Avishai Sender of Gornitzky & Co.—Unruly has accumulated debts of approximately 1 million shekels to employees, around 500,000 shekels to suppliers and consultants, and about $1 million in loans from its own founders.
“This is a technology company that has developed a system to support an innovative digital currency. However, in recent months there has been a dramatic drop in the currency’s value, leading to serious cash flow problems,” the petition states. The company added that efforts to raise additional funding and secure strategic partnerships have failed, despite founders injecting $1 million in loans in a last-ditch attempt to keep the operation afloat.
According to the request, the Spacemesh coin was valued at approximately $0.50 in March 2024, reaching a peak of $0.70 in November 2024. But since late 2024, its value has plummeted by roughly 1,750%, falling to just $0.032. The collapse has been partly attributed to the discovery that a significant concentration of coin mining activity was occurring in a single region in China—undermining the platform’s core premise of decentralization and diminishing its appeal to investors.
Following the downturn, the company informed its remaining employees of their termination on March 11. Unruly’s founders—Tomer Afek, Rami Kasterstein, and Aviv Eyal—serve as both directors and shareholders.
Despite the crisis, the company emphasized in its filing that it holds the rights to receive an additional 6.3 million Spacemesh coins, which could be valuable in the future. “The company has a right to receive 6.3 million additional coins, beyond its current holdings. Under these circumstances, it is appropriate for the appointed trustee to examine the possibility of rehabilitating the company,” the request states.
In a statement, the company said: “Investors in the company believe in the importance of our open-source, publicly accessible technology for the benefit of the public and humanity at large. They remain committed to the mission and believe in the potential to rehabilitate the company.”
