Aergo Saga: Dodgy Listings and Out of Money, VC's Dump Aergo, OTC Desk shadow operation & Investor Censorship
In the latest Crypto ICO Saga, we focus our attention on Aergo, a korean infrastructure project in high demand.
Our attention was drawn to Aergo when investors tipped us regarding unsightly practises going on at Aergo. There was an "Official" OTC desk at the URL of https://OTC.AERGO.IO opened for any investors that wanted to purchase Aergo from early investors. This was launched ahead of what we now know as the change in lock-up terms announced just days before an exchange listing just before Christmas.
Why would Aergo announce rewards to report the selling of it's tokens OTC, paying up to $4,000 USD, while opening up an OTC desk for institutions to sell their tokens to investors? Did Aergo make a profit from transactions that took place via it's nominated OTC Desk?
It seems that Aergo were trying to stop a dumping of their tokens on exchange listing, and tipped off several institutions weeks before the announce of a change in lock-up terms, giving them a chance to offload their tokens on the OTC market unbeknown to investors and brokers.
Did Aergo facilitate the selling of these tokens under false pretenses to retail investors who were about to get screwed? We can verify that OTC.Aergo.io is an official subdomain of Aergo.io, the companies main website, and that this URL was redirected to a google form whereby investors would enter their details and request the purchasing of Aergo Tokens via OTC.
We tried to do some further due diligence on this OTC Desk but found zero footprint of the Desk actually existing, leading us to think that Aergo was actually behind the OTC Desk. We later found out that the company may have been selling advisory tokens and non-team member tokens from different non-locked up reserves on the OTC market in order to raise funds before it listed, giving additional evidence that the company is facing a severe cash flow crisis.
Venture Cap Investors Dump Aergo on Mass.
Phil Zamani, CEO, dodged the question by stating that it was prohibited to sell or trade Aergo before TGE, but did not deny the existence of Aergo's OTC Desk. Furthermore, we also understand that Zamani claims to have spoken to the vast majority of their investors. In an official correspondence sent to investors, it states that anyone not willing to agree to the new lock-up terms would be refunded. Just 24-48 hours later, aergo announced the imminent listing of Aergo. This is an amazingly quick turn around time to speak to over 20 suggested institutions and agree acceptance of the new release schedule. It would suggest Aergo had already told VC's of the suggested lock-up change and given them an opportunity to dump on market weeks prior.
From the amount of Aergo sold OTC on markets, OTC data indicates that a significant number of VC investors sold Aergo Allocations, exiting the project before listing, citing concerns about liquidity problems in the current market, netting at the highest range of 600% profits at 40/60 Cents per Token with a Peg of 400+ USD in June with the lowest range and at the lowest at a 40% ROI just before listing.
Furthermore, we were informed by people close to Aergo.io's offices that the company was planning to give their Korean Investors an advantage to exit out of the project on listing. This equated to listing on Korean Local exchanges which had GEO-IP Firewalls in place to block western investors from registration. Korean investors sold for a 2-4x from ICO price as demand in Korea for the tokens remains high and rumoured exchange listings in Q1 2019 continues to circulate.
Most worryingly, news that has been verified from trusted sources has emerged that Aergo did not hedge their investment raise, suffering a catastrophic collapse in the USD value of funds. Aergo, its said to have only 2-3M USD left to run its company over 2019, prompting concerns by employees of mass redundancies on the horizon and delaying new hires. The price of Ethereum was roughly 600 USD when Aergo began to raise funds in their private sale round, this slipped all the way to 150 USD until recently, meaning that the company were unable to hedge their raise until the last token was officially sold.
It was disappointing to see Aergo's
"International" Exchange listing as Kucoin, an exchange known for rampant wash trading, manipulation and low liquidity. Having over 20 institutions represented on their website as partners really pulled up short for their exchange listings on this project. According to Korean sources, there has been considerable pressure from Korean Investors for Phil Zamani to resign following the failures around anti-climatic launch in December, having spent 6 weeks in Asia trying to convince investors not to abandon the project, consensus from investors remains the same. Investors in Korea have faced largely illiquid exchanges and have been unable to sell their tokens.
The project that lacks transparency
Another interesting point has emerged around the companies development capacity, and concerns around Transparency. Earlier this week, Aergo published a document on medium in the aim of making transparency, with details of token designation and fund distribution. The document did not show the price per token for investors and was largely disregarded as being oqaque as could be.
So far, investors in Aergo's communicate that have raised concerns only to be deleted by telegram admins as if they do not exist. As cited in the example below, these messages were deleted within minutes of being posted.
Furthermore, a public criticism of Aergo cites "The development team has extensive experience in the blockchain field, but there is no information about the Linkedin of Members. Investors and Readers can not verify the information provided by the project team". Is Aergo really what is claims to be? It seems as the more we unravel around the project, by connecting information in Korea and Aergo's western center of operations, the more we learn that Aergo is facing a reputation crisis and a economic disaster.
Zamani recently underway an interview with CryptoZombie, Crypto Lark, Crypto Candor and Shill Nye, youtube "influencers" known for shilling projects. https://www.youtube.com/watch?v=H8yY6GnnsAA
We asked Phil Zamani, CEO and leader of Aergo.io, based out of United Kingdom, to comment on this, however he only responded that he would sue if this was published, in the true spirit of decentralisation and transparency.
Clearly, Aergo has some questions to answer.