Withcoin is accused of selling coins using a promotional video propagating alleged lies and misleading information.
The propaganda video was spread by an individual called Matsuyama. Matsuyama, also known on other sites as Koichi Matsuyama, enumerated attractive selling points for buyers, but it was later discovered that most of what he was saying was a lie, according to an overview explanation listed on the Enjin crowdfunding Class Action site.
In a project called “Final ICO,” Matsuyama aimed at pre-selling a listed fixed coin that had the potential to increase its price a thousand times. The pre-sale allegedly started in January of 2018 with 1 Withcoin valued at 0.5 yen. However, it was reportedly only possible to purchase the coins by large chunks of 10 million yen. Buyers therefore seemingly purchased Withcoin in groups.
Soon after the coin was listed on Hitbtc, its price fell to about 1/10 of the ICO price, which made purchasers suffer large losses. The business was selling a cryptocurrency giving false information, therefore, the sales contract is invalid, the victims can now claim a full refund in Japanese yen at the rate of the time when the coins were sold.
Coin In Freefall
About two weeks after being listed, Withcoin crashed to 0.139 yen. Many investors were tricked and directed to a site after viewing a Youtube video that was inviting viewers to purchase the seemingly attractive coin. As of June, more than 420 victims gathered on the crowdfunding class action litigation project Enjin for reported damages of over 1.3 billion yen ($12m).
However, testimonies show the Withcoin management team could be proven as having given false explanations to its clients. Youtube is also accused of expanding the damage by introducing Withcoin.
Considering the lowest offering price as an opportunity, the manager behind Withcoin sold a massive amount of his coins, whose price later fell to 0.14 yen. However, now it seems hard to confirm that Matsuyama was initially planning to trick investors. Anyway, it is now can be proved that the management of the Withcoin team provided misleading explanations to their customers.