Aergo Uncovered Part 2 - Exchanges drop Aergo as FBG Capital dumps allocation
In the second part of our investigation into Aergo, we unravel a story of false promises, shady dealings and backstabbing between businesses.
FBG Capital, a "fund" based in Asia known for turning 20M of investor money into 200M within a short space of time, quickly gathered a dark reputation for dumping tokens onto the market, negotiating and almost blackmailing for the most aggressive terms into projects, as much as 98% discounts, in exchange for FBG branding, in order to create demand on the secondary market for various ICO projects.
Our latest episode unravelling conflict, misery and deceit centering FBG Capital and Aergo. As a project which had "no public sale", Aergo raised capital from "Crypto VCs", shorthand for unlicensed companies in offshore jurisdictions attached to a bank account. There were many of them, but most notably of all was FBG capital, infamous for "FBG One After Market Support Program". Aergo, foaming at the mouth, purchased MM services from FBG and branding, baiting investors into the project. Yet, in true FBG style, Aergo allocation ended up on the public market, prompting meager complaints by the projects management team that it looked bad and that they were supposed to be vested long term. Aergo did not put their foot down, according to inside office sources.
Zamani explained to the team that Aergo's ability to list on higher tiered exchanges, depended on the performance of the project upon listing, it would need to prove their worth on lower Tier 3 and Tier 2 exchanges before being able to enter the golden gates of Binance.
Things started to go horribly wrong just a few weeks prior to listing, as FBG started to reach out to private funds and other VC's that they were looking to liquidate their ENTIRE allocation in Aergo, this caused fund managers to start sweating in their seats. An avalanche of Aergo's supported started to resell the project, taking their chance to lock up profits before listing, instead of enduring a price dump which the project could not cover from, citing one individual at FBG,
"The trend we have seen is that one the project dumps, retail investors lose confidence and it is near impossible for the project to recover after this... It will take a miracle in projects that, tbh drop community engagement and drift off into retirement to recover. Risk is too high for us, we sell now rather than have our liquidity locked in for maybe 1 year more or so".
For FBG, the strategy is simple, they exist to make a quick profit and to move onto other, tangible investments, mostly in startups across the world and for equity. ICO's are a cash raising exercise for them, by using luck, branding and strong-armed tactics, they essentially receive tens of millions of dollars in tokens backed by retail investment.
After the herd of VC's started to resell their allocations to anyone they could find, Aergo tried to organise a single-line exit, for a calm, organised and honorable path to profit. This blew up in the face of Aergo as VC's opted their traditional method of putting on huge mark ups. One Korean investor group, had quoted that they had paid $.80 cents per token, netting VC's like FBG a huge profit.
Part 2: Aergo Wash Trades Volume, Deceiving Investors.
As FBG and its cronies exit, Aergo is finally listed on Gopax, reporting almost $0 USD Volume. According to one Aergo employee, one Market Maker has been paid to "try and pump the token and keep wash trading to boost volume on CMC". We looked into these claims and spotted something peculiar. The source checked out. Bilaxy's exchange, reporting a volume of half a million US dollars, seemed to be playing up.
Orders firstly were not appearing on the order book, but in the order history, trades were being made every few seconds, in groups of buy and sell orders, equal to almost both sides. In total, wash trading, an illicit and illegal activity in the eyes of regulated jurisdictions, is actively happening on Bilaxy since the listing of the project.
On Bilaxy, approximately $500,000 - $700,000 USD has been deployed to "wash trade" Aergo, giving investors an impression that there is real liquidity behind the exchange. We examined the trading further, and saw another peculiar event. When we placed orders and tried to capture some of the wash traders, the order book would move instantly, if we could even catch a wash trade, most of the wash trading orders were not appearing on the order book at all, they were trapped between the spread and constantly maintained a volume of 2000-4000 Aergo for 5 days, 24 hours a day so far.
In terms of orders not originating from wash trading, well, Bilaxy has been pretty dead, the price has not moved in hours and seems completely dead, just 3 weeks after listing.
Kucoin, another exchange known for wash trading, also suffers from the same peculiarities, however the volume involved in wash trashing, ranges between 200-400 Aergo per trade, 24 hours a day, seconds apart.
In both circumstances, the market makers appear to be dropping the price of Aergo down, by consistent selling orders as shown below. This may be due to an attempt to "draw" bullish technical indicators using basic scripts, however, as Aergo retests supports each time, investors panic sell, breaking support and forming new lower lows.
We were anonymously sent what appeared to be an FBG One Deck from an Aergo employee, indicating what kind of services Aergo were aiming for. Aergo apparently deploys a set amount of capital with market makers which has also been depleted.
In our conclusion, with almost zero selling liquidity, as the lock-up has been changed, Aergo has opted for its own token to dump, it would not be difficult for Aergo to maintain a steady price with only a small fraction of it's capital raised, in order to appease investors and treat them with dignity. It's clear that the project has decided to let its price collapse, through no investors fault of their own. Can they come back from the brink?
Part 3: Exchanges Drop Aergo
The following account is from a member of Aergo's Project via Telegram, suggesting that the fallout from the VC reselling resulted in them not really being interested to help list them on exchange, on top of that, all the other projects they also promised to get listed on Tier 1 exchange, means they will be kept very busy.
The Aergo employee explained how the environment and atmosphere has changed, as a witch-hunt has begun in the project to find leaks. The management team have begun to start lines of inquiries to find out who has been leaking this information, even though its widely known throughout the company and would be hard to pinpoint to one person. Phil Zamani's reaction to the previous article was to ignore anything and pretend that nothing has been said or done, secretly inside however, he is panicking and going crazy. Something akin to the Hitler Downfall Parody was said to be appropriate for the current situation in Aergo.
Investors flocked to Aergo's telegram demanding answers, and proof to dismiss claims in the previous articles, but admins stated they would not be giving any answers.
Although we know that Zamani won't try to prove anything as it will expose Aergo, and no, leveraging Blocko wouldn't count as satisfactory. What will he do next? At least this time, Aergo wasn't the one that will get away.
.. And that's the way the cookie crumbles. It seems that Aergo, that began with a fairy-tale beginning of wild aspirations and meadows of crypto profits slowly descending into just another ICO project, hyped and shilled by VCs and influencers, and slowly dumping over time to never be seen again.