A crypto startup that raised close to $80 million in a 2017’s ICO funding has come in the midst of a controversy.
Singapore-based crypto-wallet TenX is facing accusations of insider trading after its co-founder and now-former CEO Julian Hosp allegedly dumped $2.2 million worth of PAY tokens. An internal management scuffle reportedly led to Hosp resigning from all his positions in TenX. In what could have been an emotional response, Hosp allegedly exchanged all his PAY tokens for other assets and sent the entire balance to his Bittrex deposit address.
Effect of Hosp’s Actions
His actions brought a strong selling sentiment to the PAY/USD rate. The pair was already bearish due to a market-wide crypto crash. It didn’t correct even at a time when rest of the crypto space was rebounding from its lows. The PAY/USD rate dropped 46.5% in the last 15 days, and 20% over the previous seven days.
The TenX community expressed its outrage over the fiasco, criticizing the TenX team for not managing the project well. Many also extended their criticism to TenX’s operational capability, stating that the company didn’t launch their Visa-enabled crypto debit cards.
“They say they [released the card] in Japan but after reading around it seems like people in Japan never even actually got them so nope,” exclaimed CryptoGod12 on Reddit. “No fucking cards after [two] years of so-called “development” and over 30 million in ICO funds.”
The community also ran a history check on Hosp. It provided them information about his earlier involvements in an Austrian multilevel marketing scam Lyoness. Before he dumped his PAY holdings, Hosp was already receiving monthly compensation from the PAY token reserves.
TenX attempted to calm the situation by publishing a blog post full of clarifications.
Toby Hoenisch, co-founder, and CEO of TenX assured that they had introduced stringent trading standards for employees and partners. However, they received no such information on trading from Hosp.
Hoenisch refused to provide any more information on the matter.
“We are unable to provide any comments on the transfer and alleged trading of PAY tokens potentially undertaken by current and former employees of TenX,” he wrote. “We note that the transfers and alleged trading took place on dates after the Announcement Date, and such alleged trades, would have been made on publicly available information.”
The unnerved community accused Hoenisch of deflecting from the accusation. Redditor GMGH stated:
They are missing or deflecting from the point that the evidence provided is concerned about an ex-employee allegedly dumping 2.2M tokens on the open secondary markets. There is only one question everyone wants [to b]e answered: Did Julian Hosp sell 2.2M tokens on Bittrex?“
The matter is now in the open. SunshineCrypto will keep monitoring this story for more updates.