On a recent episode of The Crypto Show, Daniel Krawisz, who previously worked as a backend developer at Mycelium, shared some of the issues he perceived with the bitcoin wallet provider’s token offering from last year.

Mycelium’s initial coin offering (ICO) was designed as a way to offer shares in their bitcoin wallet to their users; however, how the value of the tokens would have any direct connection to the value of Mycelium’s wallet offering were not made clear in the basic terms and conditions for the crowdsale.

As reported by Bitsonline, much of the funds raised during the ICO were spent on staff salaries and legal costs, and some investors in the Mycelium token sale have become disgruntled due to a perceived lack of development activity since the ICO.

According to Krawisz, who is perhaps best known for his contributions to the Nakamoto Institute, he was skeptical of the token sale from the very beginning, and he eventually left the company after he witnessed funds from the sale being used for a vacation in Spain.

Rumors have been swirling about the possibility of new ownership taking control of Mycelium, and Krawisz added fire to these rumors during his recent interview. However, according to Mycelium Community Manager Dmitry ‘Rassah’ Murashchik, many of the claims made by individuals on social media are untrue.

“Nothing was sold,” Murashchik told CoinJournal. “[The] company [is] still owned by original owners who have no intention of selling, other than the 5% stake already sold and maybe another 20% stake later.”

Token Sale Funds Were Used for “Vacation”

According to Krawisz, the reason he left his role as a backend developer at Mycelium was a combination of the token crowd sale with what the funds were used for immediately after the round of funding was closed.

“One of the first things they did when they sold these tokens is they kind of bought a vacation in [Spain] for all of the developers,” said Krawisz. “It was literally like a vacation because nobody did any work there. This is kind of why I decided to leave the company. I didn’t like that they were selling tokens in the first place, and then I didn’t like that they were immediately spending the money on a vacation.”

When asked about the vacation in Spain, Murashchik admitted that it happened but had a different characterization of the event.

“We had a company retreat [or] get together to strategize, yes,” said Murashchik. “We all live around the world, and the boss wanted to get us all together to strategize on how we should go forward, believing that this is best done in person. [Spain] was chosen because that’s where he was at the time, and it was the closest location to all but one or two of our devs, since most live in Europe and one was on vacation in Spain already. Only two employees had to be flown in from overseas. The entire trip didn’t actually cost the company that much, and we tried to save as much as we could. There was work done there, some development and a lot of discussions on business plans, issues to resolve or change, and ways to improve security/privacy.”

When reached directly by CoinJournal, Krawisz had the following comments to share about the vacation in Spain:

“I don’t know how expensive the vacation was relative to the total token sale. I mean it probably wasn’t such a big fraction of the total but it really made me feel bad that I was with a company that didn’t have any revenue or any obvious business model. Taking a vacation is what you do when you sell out of a successful business, not when you successfully raise money that you are supposed to use to build a viable product.”

‘A Ridiculous Valuation’ of Mycelium from the Token Sale

According to Krawisz, he learned of Mycelium’s implied valuation of $80 million, which was calculated based on the funds raised from the token crowdsale, from an episode of Bitcoin Uncensored. Krawisz then noted that “it was a ridiculous valuation” because, according to him, the company had $40,000 in total revenue in its entire history of existence.

Murashchik told CoinJournal that a more accurate valuation based on the token crowdsale was $47 million, which was based on $2,353,000 raised in exchange for 5 percent of the company. The Mycelium representative added that employees don’t know the company’s actual revenue totals, but he also stated, “I do believe our business revenue plan is solid, even if it’s taking a while, as we’re already up to about $3,000 to $4,000 a month in revenues basically starting from scratch, and that number is growing.”

Krawisz also shared a story from his time on the aforementioned vacation in Spain. He paraphrased some comments from a “higher-up” at Mycelium as follows:

“These lawyers, you know, when we talk about making [a] token sale, they tell us, ‘This is illegal; you are going to jail.’ These lawyers, they believe everything needs to go by a template, and we wanted to do something new.”

“I just thought it was so weird that he was like joking about lawyers saying that they were going to go to jail for this,” added Krawisz.

In terms of these statements from the higher-ups at Mycelium, Murashchik told CoinJournal it “didn’t happen”.

“The higher-ups had the lawyers work out to make sure the token sale was legal, and the high legal costs for the lawyers to work all that out unfortunately used up a lot of the funds raised too,” Murashchik added.

Editor’s note: The post’s title has been amended to include quotations around the word “vacation” to indicate that this is Krawisz’s phrasing.