VELTYCO’s Bump and Dump Scheme around ESPORTS.COM
Yesterday, one of our network journalists got in touch with us from a Las Vegas esports event. He informed us about rumors in the young esports industry about the ESPORTS.COM ICO scam and the collapsing of the project.
When VELTYCO announced its plans to get into “blockchain and cryptocurrency” back in December 2017 its share price made a whopping 20% jump. It was Blockchain party time back then. Meanwhile, the pixie dust was blown away revealing the mostly ugly nature of things. Take VELTYCO’s ESPORTS.COM venture, for example. VELTYCO hyped ESPORTS.COM as the next big thing and now the project turns out to be a scam leaving disappointed investors and people behind it. The online magazine Twin Galaxies reported yesterday, that ESPORTS.COM have not paid several people for their services and that the whole project is dodgy at least.
It seems that VELTYCO’s idea was to use the cryptocurrency and ICO hype to upgrade its own brand and drive market capitalization north. VELTYCO’s public relation is nearly not existing and the information provided is mostly misleading. Those guys obviously have never heard about appropriate disclosure policies.
The ICO Show that failed to attract investors
The German guys Benjamin FÖCKERSPERGER and Philipp GEPPERT are named as the “official” founders of the blockchain-startup esports.com. The startup conducted a mediocre ICO in 2017 issuing its Ethereum-based “Esports Reward Token” (ERT).
The goal of the ICO that launched on November 1, 2017, was to raise USD 20 million. Actually, esports.com raised next to nothing in the public ICO but the team claimed that it raised around USD 5 million in a private token placement before the launch of the ICO. Details of this private token placement were never disclosed. People close to the project say that it was the UK-based VELTYCO group and its friends that bought the private token placement but it was never disclosed officially.
According to Benjamin FÖCKERSPERGER, the domain www.esports.com was bought by the team for a “seven-figure number“. Rumors say that the funding for this domain purchase was also provided by the VELTYCO group. Consequently, VELTYCO announced a partnership with esports.com before the launch of the ICO. The obvious intention was to push the ICO and induce potential ICO investors to buy esports.com’s ERT token. The plan didn’t work. The ICO was a big failure even though FÖCKERSPERGER and GEPPERT toured the globe and presented themselves as sort of esports celebrities.
Misappropriated Money, Disappointed Investors and a Destroyed Brand
The ESPORTS.COM whitepaper explained that the ERT token can be used to bet on esports events. Now, it turns out the bets on esports events will not be offered at all. Hence, a big value driver of the ERT token – betting income – was terminated. Investors were obviously misled about the strategy of the project.
In the Twin Galaxies article, a former service partner of ESPORTS.COM reported that the ICO funds were not used as advertised to investors.
The money (as far as I know) was not being used to pay content creators, as I myself was definitely not being paid. Over $5,000,000 of the $20,000,000 final goal was given. After that money was provided it seemed like people kept dropping from the company like flies. It seemed like the company was just running with the money, and various production companies and contributors went unpaid for months of work (read more)
Well, the guy is right regarding the people that left the venture. Maybe the ICO failure was the reason why FÖCKERSPERGER and GEPPERT had to leave esports.com in February/March 2018.
On his Facebook page and in an esports Facebook group, FÖCKERSPERGER stated that he has legal issues with his investors which were the reason for his departure:
I would like to clarify that I am currently talking with the other parties of the esports.com project regarding my remaining in the project. The reason for these talks are differences between me and in particular the investors of the project.
The investors are actually VELTYCO and its people. Let’s wait how this develops over the next couple of weeks. The big question now is: where is the money and how are investors compensated for their investment into false promises? And, most importantly, who was the architect of this scam? The two German founders or VELTYCO and its people around Uwe LENHOFF? Actually, VELTYCO seems to work hard to make its own shareholders believe that ESPORTS.COM is a success story which it isn’t. On the contrary! It’s an example of “how to destroy a valueable brand in just a few weeks”.