After a dissatisfied investor filed a lawsuit in mid-August 2018 regarding the Unikrn eSport betting token in Washington State, a legal dispute also seems to be imminent at the next eSports token.
Sergey Sholom is CEO of DataCraft, the start-up company behind the MobileGo ICO, which raised over USD 53 million (at the then USD 50/ETH exchange rate) in the public token sale of the MGO token in May 2017.
The purpose of this token was to be a complementary token for the existing GameCredits token. GameCredits is an open source project that the Sholom brothers associated with GameCredits Inc in the course of the ICO. The GAME token issued by this project should be the currency within the games, whereas the MGO was positioned as the betting token in the eSports tournaments.
The MobileGo ICO’s white paper at the time actually promised a lot: contracts with 100 developers for the production of 300 games are said to have already been signed in May 2017. Obviously this did not correspond to the truth. Meanwhile there is probably only exactly 1 (one) game.
Based on a blog post by a developer who, following a visit to Belgrade, Serbia, the headquarters of the project’s miniaturists, wrote a medium article reporting on the obviously disastrous state of the project and another report by team member Jack Kuveke on Reddit in which the accusations are confirmed, the project operators are currently increasingly under criticism.
Obviously, the plans for the project originally announced in the ICO never came to fruition and obviously it was mainly the project initiators Sergey Sholom and his brother who were mainly on the road and repeatedly adapted their plans. As a result, part of the former ICO team is in the process of setting up a GameCredits Foundation to implement the original idea. This organization will most likely be self-financing through a mixture of contract work and donations (either from foundation members or parishioners).
The funds collected in MobileGo-ICO are managed exclusively by the Sholom brothers and, according to Jack Kuveke’s report, were not used to pay the developers as mentioned in the white paper.
Sergey Sholom has no understanding for the excitement among the token investors after the publication of the above reports. These ICO investors are understandably primarily interested in the whereabouts of their money. He announced on the MobileGo channel that legal action against anyone would continue to spread rumors that could damage the token value.
— Ciaran Murray ⚡️?♂️ (@C1aranMurray) August 17, 2018
The difference between a token holder and a shareholder becomes obvious in this case. In view of such a situation, shareholders would have every opportunity to bring about a change of management and thus protect their investment. Token holders have no corresponding rights and are more or less helplessly at the mercy of the project initiator.
Due to the domicile of the token issuing company in Serbia – an officially corrupt country with serious deficiencies in the court system – an investor action actually has little chance of success. But this is another new lesson that needs to be learned in the crypto world.