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‘Fan token’ firm Socios accused of crypto value manipulation

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Alexandre Dreyfus, the CEO and founding father of fan token web site Socios, has been accused of withholding funds so as to preserve the worth of Chiliz (CHZ), the cryptocurrency utilized by the Socios group, in keeping with 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 will vote on choices inside their group. In Socios’ case, the platform facilities round sports activities, with customers shopping for Chiliz to buy the fan tokens representing varied groups in soccer, soccer, motorsports, and extra.

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

His motive for not paying out advisors? An inside 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 traders,” Dreyfus writes within the screenshotted message. “Once 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 traders” who purchased Chiliz might be dropping cash because of advisors promoting off the foreign money.

The tech government referred Off the Pitch to a few different advisors who additionally allegedly went unpaid, and bought affirmation from one among 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 up to now weren’t paid in a well timed method and now we have rectified this with them instantly and preserve good relationships in the present day,” a Chiliz spokesperson advised 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 instantly because it wasn’t listed on any exchanges. To be clear, this delay is unacceptable and never the way in which we need to run our enterprise, and falls in need of the requirements to which we maintain ourselves in the present day.”

Workers members, who had been additionally speculated 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 exchange those beforehand signed by staff, leading to a smaller allotment of crypto, Off the Pitch reviews. 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 submit 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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