Many of South Korea’s blockchain startups are facing financial pinch because they failed to manage funds.

Many of them mobilized cryptocurrencies including Bitcoins and Ethereums through initial coin offerings (ICOs) early last year, but they delayed converting the cryptocurrencies into cash to finance their projects.

Instead, they kept the cryptocurrencies they raised through the ICOs. As the cryptocurrencies nosedived to a new record late last year, they felt the financial pinch, began to trim operations or to close business.

Despite the government’s crackdown, many of them were successful in raising capital, but they failed to manage the cryptocurrencies for investing in the development of new technologies, a Seoul fund manager said.

The manager said his company has indefinitely put off recruiting fund managers in charge of running blockchain funds.

For example, a Seoul-based startup could raise 40 billion won worth of Ethereum through ICOs early last year, but it held the Ethereum out of the expectation that its value would rise.

However, the prediction proved wrong, and its value more than halved late last year, cornering the startup.