These Two Blockchain Start-Ups Pulled an $8 Million ICO Exit Scam
Two sisiter blockchain startups have allgedly pulled a massive exit scam. | Source: Shutterstock
By CCN: Two blockchain companies, JoyToken and RepuX, have been dissolved, according to UK business records. Both companies were founded and ICO-funded on the direction of the same people. A Reddit user broke down the scandal for r/CryptoCurrency, hoping someone might have more information.
Andrew MacDonald’s JoyToken Winnings
JoyToken was to be an “ecosystem” for gambling development. Game developers could use a toolkit and a common token to build provably-fair games. MacDonald saw this as an advantage over simply building a casino on Ethereum. The company never produced a working product. The token last traded for $0.00007146, says CoinGecko.
According to an earlier post on Steemit, “bounty hunters” – people who promoted ICOs in exchange for tokens or sometimes payment in other cryptocurrencies – were all hung out to dry as things progressed. The decision to rip off their promoters resulted in an ICO promotion firm, AmaZix, cutting ties with both companies. AmaZix reportedly wrote a note to bounty hunters, which read in part:
“The ICO teams have stated that because of the lower than expected results in their token sales they are no longer willing to pay out the originally allocated amount to the bounty participants. At AmaZix we value honesty, straightforwardness and the value of a deal above everything and therefore we decided that we can’t go along with any unilateral modification of the bounty allocation that could tarnish our reputation.”
$3 Million in Unpaid Marketing Fees
Each company committed to pay out $1.5 million in bounties,