Another Crypto Exit Scam Sees Fake ICO Token Sale Of $8 Million By RepuX And JoyToken Vanish
Exit Scam: RepuX And JoyToken Vanish After Raising $8 Million In ICOs
We all wish we could say that the crypto market was free of scammers. Unfortunately, that does not seem to be the truth at the moment. Even in 2019, exit scams are still a thing. Exit scams happen when companies have their Initial Coin Offerings (ICOs) in order to make funds but never actually intend to deliver anything and get away with the money.
The latest case is about two different blockchain startups which basically conned investors around the same time. RepuX and JoyToken were able to con investors out of $4.7 million USD and $3.3 million USD, respectively.
According to The Next Web’s Hard Fork, which investigated this story, the U. K. offices of the two companies were recently dissolved and they vanished.
While RepuX was alledgedly trying to create a data marketplace that would be powered by the blockchain, JoyToken was focused on “decentralizing gambling” on its platform.
Unlike several other companies which scammed investors, these two actually had several advisors and marketing partners, so they were very high-profile.
The two platforms were connected. Both of them were based in the United Kingdom and were created onallegedly5, 2017. They even had the same address.
The Exit Scam
According to members of BitcoinTalk, these companies started to be suspicious around a year ago. They were supposed to pay some fees to their promoters but they never actually did. A marketing company called AmaZix was coordinating the ICO campaign, but it eventually left the project. Why? “Irreconcilable differences”.
AmaZix used to manage the communities of both platforms, but eventually, the company ran into problems because the other two companies were not very happy with paying the promoters. They believed that they did a worse job than expected and wanted to pay less because of that.
Both ICOs had a soft cap of $1 million, though, and they got, together, over 8 times that amount, so that was really just a very poor excuse.
Now, the companies have vanished from the internet and their ICO pages have been completely deleted. Social media networks like Twitter have simply been abandoned for quite a while now, too. RepuX’s last tweet is from October 15 last year and JoyToken’s was from July 20 in the same year.
During the ICO phase, which happened between March and April 2018, both companies were heavily promoted around the web. The CEO of JoyToken, Andrew MacDonald, even attended to a conference, the North America Blockchain Expo and also participated in an industry event in Dubai.
The companies even went as far as buying ads on Cointelegraph, where they promoted their projects, according to the Hard Fork.
Mike Leys, CMO at the company, as well as the CTO Steve Giordano Imbroll have stopped to work there last year, too, according to their profiles, which may mean that the companies were not a scam at the beginning but ended up vanishing in a malicious way after something may have gone wrong.
Unfortunately, many token projects have failed to deliver. 2017 was full of hype and 2018 had some of it, too, but many projects simply did not work out. While that is somewhat understandable and everyone investing in ICOs knew that a bet was being made, exit scams are not acceptable.
Companies cannot simply take people’s money without any kind of accountability whatsoever, which is the main problems that the 2017 wave of ICOs created. Unfortunately, this is why countries like the United States have their securities laws. They may be a hassle for successful projects, but they protect investors from the bad ones.