This is what the XoloX development team e-mailed to
InfoAnarchy:
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XoloX is a small, privately owned company that does not have the means to fight the recording industry Goliaths (even though we have a David in the XoloX team). The market for venture capital for Internet related projects practically dried up leaving hardly any possibilities for new initiatives or developments.
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Erik from InfoAnarchy comments:
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Given a "financial injection", XoloX may resume operations, but that seems unlikely. Meanwhile, their Gnutella client of course remains in a usable state, however, it is currently not decided whether the source code will be released. To my knowledge, this is the first working decentralized client software that has been discontinued for fear of litigation.
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- tg