Even thought it’s 2019, initial coin offering (ICO) exit scams are still being uncovered. The latest to surface has seemingly conned over $8 million from would-be investors.
It appears that blockchain startups RepuX and JoyToken have conned investors out of $4.7 million and $3.3 million, respectively. An investigation by Hard Fork revealed that their UK offices were dissolved earlier this week, as confirmed by Companies House, the registrar of UK-based companies.
RepuX claimed that it was trying to build what it called a “blockchain-powered data marketplace,” while JoyToken was trying to create a decentralized gambling platform, powered by its own JOY token. Interestingly, the startups shared numerous connections, advisors, and marketing partners.
Members of the BitcoinTalk forum first started raising their suspicions about the two projects around a year ago, after RepuX and JoyToken failed to pay their initial coin offering (ICO) promoters the fees they had originally been promised.
At the time, both projects were represented by AmaZix, a marketing agency that specializes in promoting ICOs and blockchain startups; in this instance though, AmaZix simply managed the communities of both platforms.
According to Telegram messages, AmaZix first began working with RepuX and JoyToken in December 2017. It eventually ended its relationship with the companies the following May due to “irreconcilable differences.”
AmaZix had originally been coordinating the efforts of individual ICO promoters (bounty hunters) but severed ties with RepuX and JoyToken after disagreeing over how the promoters should be compensated for their efforts. The ICO teams claimed it was changing how much bounty hunters would be paid because the token sales performed worse than expected.
That said, RepuX raised nearly five times its original soft cap, and JoyToken over three times its original soft cap according to Token sale announcements made in community Telegram channels. Both projects had soft caps of $1 million.
As it stands today, all Telegram channels associated with the two ICOs have been deleted. The websites of both projects are also no longer live (though there is an archived version for RepuX that can be found here).
The Twitter accounts of both the projects also haven’t been updated since last year either. RepuX’s last tweet is dated October 15, 2018 and JoyToken’s is dated July 20, 2018.
Both RepuX and JoyToken were promoted heavily in the run-up to their ICOs, which took place between March and April last year. JoyToken’s CEO, Andrew MacDonald attended the North America Blockhain Expo, and tweeted that he was attending a Unblock BC event in Dubai with “sister company” Repux in January last year.
The JoyToken project also bought ad spots at Cointelegraph, where it further promoted its decentralized gambling ecosystem.
Indeed, the links between the two ICOs don’t stop there. According to ICObench, both projects listed Lee Murphy, and entrepreneur Mateusz Mach as advisors – the latter of whom has previously been listed in Forbe’s 30 Under 30 series. How involved they were in these projects though, remains unclear.
It also appears that JoyToken’s CMO Mike Leys and CTO Steve Giordano Imbroll stopped working for JoyToken last year, according to their LinkedIn profiles.
Given the lack of updates, websites, and previous track record of not seeing through on their promises it all fingers point towards JoyToken and RepuX being exit scams.
With news like this, you’d be forgiven for thinking it was still 2018. But as we should know by now, exit scams are sadly a part of life when it comes to cryptocurrency. Perhaps we shouldn’t be surprised, when even the top 100 cryptocurrencies are failing to deliver on their promises, and a sizeable number of ICOs have already been revealed as scams.
Correction 15:44PM UTC, May 16, 2019: AmaZix CEO Jonas Karlberg reached out to Hard Fork to point out that the creative agency helped RepuX and JoyToken with community management; he further added that promotion and content production for RepuX and JoyToken wasn’t handled by AmaZix. We’ve updated the piece to reflect this.
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