Blockchain consortium R3 CEO blasts rumours of financial woes

R3 chief David Rutter hits back at ‘false rumours’ of financial troubles spread by two former employees.

The chief executive of blockchain consortium R3 has come out fighting against rumours that the company is facing financial difficulty.

David Rutter said in a statement that an “inaccurate” and “negative” news article about R3 had been published as a result of disgruntled former employees of R3 spreading false rumours.

Fortune published a story last week that said despite having raised more than $100 million in funding, two former R3 employees claim the consortium could run out of money as early as the start of 2019.

“We were saddened that any of our previous employees saw fit to spread false, malicious rumours about the company,” Rutter said in response. “We are happy to set the record straight. Firstly, R3 is in a very strong financial position.”

He added that the company has raised over $120 million from more than 45 financial institutions and recorded over $20 million in revenues, with average operating expenses per employee having declined every year since launch.

“R3 has more than sufficient funding and continues to see inbound investment interest,” Rutter said. “If we decide to take on additional funding it will be because we see the strategic value of the investor, or because it will help accelerate our growth to meet demand.”

Founded in 2014, R3 was established by nine major banks including Goldman Sachs, Credit Suisse, JP Morgan and others, with the goal of applying blockchain technology to capital markets.

The blockchain consortium was hit by a number of high profile departures at the end of 2016 starting with the exit of founding member Goldman Sachs. Santander, Morgan Stanley, JP Morgan were also among the companies who decided not to renew its membership with R3 following the withdrawals of Goldman Sachs.

R3 responded to these departures by adding Dutch bank ABN AMRO, Cincinnati-based Fifth Third Bank, insurance provider Suncorp Group and financial services company Synchrony Financial to the consortium.

Last month, R3 also confirmed it had received funding of $5 million from FX settlement and market infrastructure specialist CLS, which will work alongside R3 to further develop its Corda platform.

“Support for Corda is coming from the financial services community and a cross-section of other industries in countries across the globe. Corda is a unique, open source platform designed in part to help small entrepreneurs succeed in building solutions for their customer base,” Rutter added.