Technology

‘Fan token’ company Socios accused of manipulating cryptocurrency prices

Alexandre Dreyfus, CEO and founder of fan token site Socios, has been accused of withholding payments to maintain the price of Chiliz (CHZ), the cryptocurrency adopted by the Socios community. use, according to a report from Off the Pitch.

Fan tokens are pegged to real-life sports teams, creators or artists and grant token holders access to exclusive fan clubs where they can can vote on decisions in their community. In the case of Socios, the platform is focused on sports, with users buying Chiliz to buy fan tokens representing different teams in soccer, soccer, motorsport sports and more.

According to the report of Off the Pitch, Dreyfus allegedly failed to pay some of his advisors a portion of the agreed-upon Chiliz shares in exchange for crypto endorsements. An unnamed tech executive told Off the Pitch that he received only “some portion of what was promised,” and claimed Dreyfus began “avoiding all contact with advisers” in September 2020.

His reason for not paying advisors? An internal message from Dreyfus was viewed by Off the Pitch indicates that Dreyfus does not want Chiliz’s value to increase. “We also need to protect our investors,” Dreyfus wrote in the screenshot. “When you offer free tokens, people can sell for any price – it doesn’t matter to them.” He then went on to note that “real investors” who bought Chiliz could lose money as advisors sell off the coin.

Technology CEO introduced Off the Pitch to three other advisors, who are also said to have been unpaid, and have received confirmation from one of them. Bizarrely, an advisor contacted Dreyfus again – the context of their conversation was unknown – and reported back to Dreyfus. Off the Pitch that all four advisors were eventually paid in full. It’s unclear if Chiliz’s other advisors are still unpaid.

“We regret that some of the advisors who have worked with us before were not paid in a timely manner and we have corrected this directly with them and maintain a good relationship today.” Chiliz spokesman said Off the Pitch. “The agreements were made when the company was just starting up and at that time we were not able to award CHZ directly because it was not listed on any exchange. To be clear, this delay is unacceptable and not how we want to run our business, and falls short of the standards we hold up to today.”

The employees, who were supposed to receive a portion of their salaries in Chiliz, were not so lucky. As Chiliz’s value skyrocketed, an employee claimed they couldn’t make the $10 million Dreyfus owed. Chiliz then opened up a new contract to replace those previously signed by the employee, resulting in a smaller cryptocurrency allocation, Off the Pitch report. The employee owed $10 million is said to have only been paid back about $60,000 as a result of the new arrangement. Another employee is said to have been fired after speaking out about the matter to the press.

The Verge reached out to Chiliz for comment but did not receive an immediate response.

https://www.theverge.com/2022/3/12/22974337/fan-token-company-socios-accused-cryptocurrency-price-manipulation ‘Fan token’ company Socios accused of manipulating cryptocurrency prices

Fry Electronics Team

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