By CCN.com: Two blockchain companies, JoyToken and RepuX, have been dissolved, according to UK business records. Both companies were founded and ICO-funded on the direction of the same people. A Reddit user broke down the scandal for r/CryptoCurrency, hoping someone might have more information.

Andrew MacDonald’s JoyToken Winnings

JoyToken was to be an “ecosystem” for gambling development. Game developers could use a toolkit and a common token to build provably-fair games. MacDonald saw this as an advantage over simply building a casino on Ethereum. The company never produced a working product. The token last traded for $0.00007146, says CoinGecko.

According to an earlier post on Steemit, “bounty hunters” – people who promoted ICOs in exchange for tokens or sometimes payment in other cryptocurrencies – were all hung out to dry as things progressed. The decision to rip off their promoters resulted in an ICO promotion firm, AmaZix, cutting ties with both companies. AmaZix reportedly wrote a note to bounty hunters, which read in part:

“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. At AmaZix we value honesty, straightforwardness and the value of a deal above everything and therefore we decided that we can’t go along with any unilateral modification of the bounty allocation that could tarnish our reputation.”

$3 Million in Unpaid Marketing Fees

Each company committed to pay out $1.5 million in bounties, but in the end, only paid out $50,000. $1.5 million would have been nearly half of each company’s fundraising efforts. Arguably, though, they never would have made anything without their army of promoters.

JoyToken CEO Andrew MacDonald has set his Twitter account to private.

In this interview with MacDonald, he says:

“We have a dedicated PR team who are always looking for new opportunities to get our voice heard. We are ensuring that we get the optimal coverage, while balancing this with prudence. We need to choose the channels that are appropriate to our particular ICO. “With regards to Bounty programmes, it is important that we get the offers and incentives right to make sure that it won’t damage the economy and ecosystem for investors.”

This article in Coinspeaker is both an example of the type of “optimal coverage” MacDonald referred to, as well as a peek at the platform that never came to be.

1,776 people hold a total of 699 million JOY. One address holds over 44% of the total supply. You can tell that investors were patiently waiting, as larger holders have round figures.

RepuX, The Polish Wing of MacDonald’s Empire

RepuX was going to be a “data marketplace” for SMEs. It raised more than the JoyToken platform – around $4.7 million

“RepuX’s blockchain-backed platform enables Small and Medium Enterprises (SMEs) to capitalize on business solutions via the data sharing network. SMEs often don’t know how to optimally utilize the data they have amassed in order to make impactful business operations decisions and lack the resources needed to implement them. Developers, on the other hand, seek data to develop machine learning and artificial intelligence-driven applications as well as enterprise customers to sell information back to. RepuX unlocks the untapped value trapped within this disconnect by allowing SMEs to upload data and list potential use cases. Developers are then able to purchase the data to create customized applications which they can then sell back to SMEs. The RepuX platform anonymizes data and maintains quality through reputation scores determined by purchasers.”

Both companies list the same people as officers, according to official British records. Andrew MacDonald is the CEO of both, and Nathen Lockett is the COO. Both companies were founded on December 5th, 2017, and dissolved on May 14th, 2019. Neither company produced a working product or provided value to customers.

Was This ICO Perfectly Legal?

We may be talking about a very successful, perfectly legal exit scam.

If the terms and conditions gave them the freedom never to produce a product and dissolve the firms under certain circumstances, investors may be out of luck. (That’s what lawsuits are for.)

Billions of dollars were invested during the ICO boom of 2017. The rise of tokenized platforms was not the first ICO boom, but it has so far been the largest. Not every ICO firm was headed by questionable people who commingled funds and lived lavishly on the backs of dreamy investors, but it might be true that a majority were. There are examples of projects that are still plugging away post-ICO, like SONM. Not to mention NEO, Tron, EOS, and other projects we cover all the time.

However, hundreds of ICOs went silent at some point during 2018, and plenty had some form of legally binding language that permitted them to go out of business under certain circumstances. The lessons of 2017 will hopefully inform the upcoming STO boom. The only hope for this industry is that people remember the scammers who came before and compare the new generation of hopeful founders accordingly.