Football Index announce suspension of platform following drastic price crash
Football Index has suspended all trading and payment transactions until further notice
A statement from Football Index has announced the suspension of the platform after receiving strong criticism from users following the announcement of a significant change in terms.
The betting company, which imitates a stock exchange and allows customers to buy shares in footballers, faced a huge social media backlash after announcing a reduction to the dividends payouts related to player performances last Friday. Within a matter of hours, share prices had fallen drastically, with some users claiming to have lost substantial amounts of the money they had invested.
A statement posted on Thursday evening acknowledged how difficult the past week had been for customers, before adding that the decision to suspend the platform had now been made.
No trading or payment transactions - including deposits and withdrawals - will be permitted until further notice.
"The Board of BetIndex Limited has consulted with external legal and financial advisors, and the UK and Jersey Gambling Commissions," the statement said. "The decision has been made to suspend the platform.
"The dividend restructure announced on Friday was a necessary step in a business recovery plan to seek the long-term sustainability of the platform. However, it is clear that this has not been well received and we need to find a more agreeable way forward.
"We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community. We are preparing this through an administration with insolvency practitioners Begbies Traynor, to seek the best outcome for customers with the goal of continuing the platform in a restructured form.
"The restructure could involve equity in BetIndex Limited being distributed to customers, board representation for customers, and a new management team put in place, along with other initiatives.
"Until such time as the administrators are in office, the platform will remain suspended and no trading or payment transactions, such as deposits and withdrawals, will be possible. Once in office, the administrators will be in contact with customers, creditors, and other stakeholders. This interim step of suspending the platform is merely to ensure that everyone’s rights are preserved in relation to funds held by BetIndex Limited.
"We fully understand and anticipate concerns regarding a temporary suspension of your ability to withdraw existing Cash Balances and assure you that they will remain held in a segregated account to be managed in conjunction with our advisors, protected by the trust arrangements that are in place and will be subject to review by the administrators.
"The Board have at all times been seeking the best way to sustain the platform as we believed a recovery was not only possible but also in the best interests of our customers. This decision is deeply regrettable, and is the outcome we were seeking to avoid by restructuring dividends. However, we believe it is the most responsible route forward for our community given the situation as it has developed.
"The administrators will release a statement upon their formal appointment by the Court, which is anticipated to be in the next 10 days and will be able to share further timelines at that point."