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Blockchain startups RepuX and JoyToken have reportedly pulled a joint initial coin offering (ICO) exit scam and said to have stolen $4.7 million and $3.3 million from investors respectively, as reported by The Next Web on May 16.
It is said to be one of the major ICO scams reported in 2019. Further investigation by Hard Fork had also revealed that their UK offices disappeared this week which was confirmed by the official legal registrar of corporations and companies in the UK, Companies House .
ICOs are unfortunately known for various scams and Ponzi schemes associated with them and pretty much have always been subjected to legal issues. The years 2017 and 2018 have witnessed investors losing a whopping billion dollars in ICO scams. RepuX and JoyToken, both had kick-started their ICOs during March and April of 2018, and apparently have managed to run away with $4.7 million and $3.3 million respectively.
RepuX was trying (or pretending to try) to raise the capital to create a “blockchain-powered data marketplace” that enables small and medium enterprises (SMEs) to capitalize on business solutions via data sharing network. JoyToken was developing a decentralized gambling platform or ‘trustless’ gambling ecosystem powered by its own JOY token. Both of these companies were offering different products/services but TNW found that ‘both companies shared numerous connections, advisers and marketing partners with the registered address for both being a house in Stoke-On-Trent in the U.K.’
AmaZix, a marketing agency that specializes in promoting ICOs and blockchain startups had started working with RepuX and JoyToken in December 2017. They cut off all connections with AmaZix because the token sales performed worse than expected. In a BitcoinTalk forum announcement about the discontinued relationship, AmaZix said:
“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.”
Currently, their UK offices are shut and in addition to that the websites and Twitter accounts associated with these faux-startups have been shut down as well. Neither of their Telegram channel has sent updates since last year.
Further investigation by TNW found that ‘key staff indicated that they had stopped working there last year as well, suggesting that the companies may have started out legitimately, with the exit scam coming later.’