‘Fan token’ firm Socios accused of crypto value manipulation

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Alexandre Dreyfus, the CEO and founding father of fan token website Socios, has been accused of withholding funds to be able to preserve the worth of Chiliz (CHZ), the cryptocurrency utilized by the Socios neighborhood, based on a report from Off the Pitch.

Fan tokens are tied to real-life sports activities groups, creators, or artists, and provides token holders entry to unique fan golf equipment the place they’ll vote on choices inside their neighborhood. In Socios’ case, the platform facilities round sports activities, with customers shopping for Chiliz to buy the fan tokens representing numerous groups in soccer, soccer, motorsports, and extra.

As reported by Off the Pitch, Dreyfus allegedly did not pay a few of his advisors an agreed-upon share of Chiliz in alternate for endorsing the cryptocurrency. An unnamed tech government instructed Off the Pitch that he solely obtained “some portion of what was promised,” and claims Dreyfus began “avoiding all communications with the advisors” in September 2020.

His purpose for not paying out advisors? An inner message from Dreyfus considered by Off the Pitch signifies Dreyfus didn’t need the worth of Chiliz to tank. “We additionally want to guard the buyers,” Dreyfus writes within the screenshotted message. “Whenever you give free tokens, individuals can promote at any value — it would not matter for them.” He then went on to notice that the “actual buyers” who purchased Chiliz may very well be shedding cash because of advisors promoting off the forex.

The tech government referred Off the Pitch to a few different advisors who additionally allegedly went unpaid, and obtained affirmation from certainly one of them. Oddly sufficient, that one advisor reached out to Dreyfus as soon as once more — the context of their dialog unknown — and reported again to Off the Pitch that every one 4 advisors had lastly been paid in full. It’s unclear if there are nonetheless different Chiliz advisors that stay unpaid.

“We remorse that some advisers which have labored with us previously weren’t paid in a well timed method and we now have rectified this with them straight and preserve good relationships as we speak,” a Chiliz spokesperson instructed Off the Pitch. “The agreements had been made when the corporate was pre-start up and at the moment we weren’t capable of award CHZ straight because it wasn’t listed on any exchanges. To be clear, this delay is unacceptable and never the best way we wish to run our enterprise, and falls in need of the requirements to which we maintain ourselves as we speak.”

Workers members, who had been additionally imagined to obtain a portion of their wage in Chiliz, weren’t so fortunate. When the worth of Chiliz skyrocketed, one worker claims they had been unable to money in on the $10 million allegedly owed by Dreyfus. Chiliz later ushered in a brand new contract to switch those beforehand signed by workers, leading to a smaller allotment of crypto, Off the Pitch experiences. The worker who was owed $10 million supposedly solely made off with round $60,000 because of the brand new settlement. One other workers member was reportedly fired after talking out in regards to the problem to the press.

Chiliz responded to Off the Pitch’s report in a put up on Medium, stating that it “doesn’t replicate the reality of the matter.”

Replace March twelfth 6:05PM ET: Up to date so as to add the response from Chiliz.

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