Ten Months, No Product: Analyst “Amazed” that TenX Hasn’t Been Sued

Apparently, the company's president worked for an alleged pyramid scheme.

An analyst at cryptocurrency news portal The Block has made some fairly serious allegations about TenX, a Singapore-based company that offers a digital wallet and promises to soon release a cryptocurrency debit card.

Larry Cermak, who also worked for Diar, said that he is “amazed there has not been a class action lawsuit yet”.

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Three claims

His most notable claims are three: firstly, that the company’s token is worth a fraction of what it was at launch:

Source: coinmarketcap.com

Secondly, that it has not had a working product for more than ten months, despite repeated assurances to the contrary:

And thirdly, that co-founder and President Dr. Julian Hosp once worked for a pyramid scheme.

Regarding point number one

TenX was created as ‘OneBit’ in 2015 and raised $83 million in seven minutes in its ICO in June 2017.

By August 2017, its token, PAY, had a market capitalisation of approximately $557 million. It dropped rapidly, picked up again with all the other coins towards the end of that year, and has consistently fallen since, as can be seen in the chart above. It is now worth around $45 million.

Hosp responds to this issue:

He appears to be arguing here that the PAY token has not lost 93 percent of its value when you measure value in Ethereum tokens.

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The payment card

The TenX wallet application has been downloaded from the Google Play website more than 10,000 times, although most of the comments appear to be from people that haven’t received their cards yet:

Source: play.google.com

As you can see, the company is active in responding to comments.

In January 2018, TenX had to discontinue its payment card because VISA terminated its agreement with WaveCrest, which was the company that issued them.

In September, Hosp announced via Twitter that new cards were ready and would be released imminently:

So they cannot evade you

The third allegation comes courtesy of Tamir Cohen Jr, executive editor of The Financial Telegram. He writes that Hosp worked for a company called Lyoness between 2011 and 2016. Lyoness is a multi-level marketing company which has been investigated for being a pyramid scheme in Austria, Switzerland, Australia, Sweden, Poland, France, Hungary and Lithuania.

Cermak found a recorded workshop apparently given by Hosp, which you can listen to here.

Source: streamable.com/6x88l

In the recording, you can can hear Hosp describing a system in which employees progress through “career levels” by accumulating points gained by signing up new members. His suggestions include:

  • Writing out your contacts in a list, which is provided by Lyoness;
  • Beginning with “warm contacts”, that is, people you know well; and
  • Selling to the warm contacts via a middleman.

To quote: “Income does not fall out of the sky, there is a predictable way of how to calculate and receive more income, and, if you follow this way, you can earn incomes in an extent that it’s not imaginable to you at this moment.”

To quote: “Whenever you contact them, you only have one goal – and that goal is to get a meeting…tell them you want to go for a drink, tell them you want to go for a coffee…never mention Lyoness, never mention anything about saving money, the maximum you can say is ‘an opportunity to make money.'”

He explains that there is a direct and indirect approach to getting signups. The direct approach is for “very very close people, people that you meet in everyday life anyway so they cannot evade you”. For the indirect approach, one suggestion is that you “always mention that you are doing this with a business partner, with a friend, so there’s some peer pressure.”

It should be noted that this work experience is not listed on Hosp’s LinkedIn account.

Just waiting for the final go

In March, Diar ran an investigation into 2017’s biggest ICOs, of which TenX was one. The company did not respond to questions from the publication.

In October, Forbes reported that the company paid its 80 employees an average of $84,000 a year (which is $6.7 million) and that it had $104 million in its ICO pot (meaning that it has grown).

Hosp said that the cards are ready, and “just waiting for the final go.”

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