A troubling characteristic of ICOs is the explicit lack of accountability that token distributors have to maintain promises. As token holdings do not represent project ownership, deceitful entrepreneurs are emerging among legitimate projects as conmen and snake oil salesmen looking to earn quick riches. A frightening Reddit post on Sunday exposed GNation’s CEO and other executives as being exactly these sorts of individuals.
The premise behind GNation, the company that oversees development of the sister currencies GameCredits (GAME) and MobileGo (MGO), is quite exciting. Among other applications, the company promised to create a mobile application store that would offer e-sports wagering, huge developer incentives, and a flagship mobile MMO that would surely see huge popularity.
These products were planned for release in the fall of last year, shortly after MobileGo’s ICO, the second largest at the time. While open betas for the app store, the MMO (titled Pixel Wars), and support from major developers such as ZeptoLab (creator of Cut the Rope) were available soon after the ICO, the transition from open and closed betas to a full release has continually been delayed. These delays, among other concerns, led to growing suspicion from community members in recent months.
Recently, these concerns have been legitimized and even exacerbated as Jack Kuveke, former Community Moderator and Product Manager, published his point of view on the dealings of GNation since the ICO as a precursor to a “Transparency AMA” that took place on July 30. Kuveke, who had been an early supporter of GameCredits and a team member with the Foundation since October of 2016, has remained a beacon of hope for community members throughout the extended stagnation of the company, when no other members played much of a role in communicating with and providing updates to the community.
Kuveke explained how CEO Sergey Sholom and his brother, Financial Director Maxim Sholom, rose to leadership and acted as catalysts for the project’s decent to its current position. Beyond traveling across the world and spending very little time in the office, the brothers had been diverting ICO funds (which are estimated to be worth US$ 200 million in conjunction with Bitcoin forks and crypto price accumulation) to other projects unrelated to GameCredits. They appointed colleagues to positions of power who oversaw these projects and continually refused to hire cryptocurrency veterans, despite many calls from employees and community members.
Beyond these decisions, many more pieces of information regarding partnerships and developments were withheld from the community and employees alike. Sergey focused heavily on promoting charity, for example, and planned to diminish the role of GAME and MGO in GNation’s products to address legal concerns. Money was also withheld from company employees. Kuveke explained that he has been unpaid for his work since shortly after the ICO, and his promises from the CEO for an ownership stake were never executed. Following the release of this information, MobileGo’s price plummeted almost 50% overnight, from US$ 0.21 to $ 0.11, as faith in GNation has been seriously disrupted. MGO’s dollar value is currently down 85% since the ICO, and it’s down 96% against Bitcoin.
This information was released due to the decision by a faction of GNation’s employees to split from the company. Kuveke, along with other longtime supporters, team members, and whales who still believe in the vision of GAME and its potential for gamers worldwide, are in the process of creating the GC Foundation. This split comes after complaints and concerns directed toward the Sholom brothers in May went undressed, and it remains unendorsed by GNation.
GC Foundation will be developing the GameCredits blockchain in an open source manner. They will fund developments initially as a blockchain consultancy group working with other projects. Unfortunately, it looks as if no funds from GNation will transfer over to this new initiative, which will not be crowdfunding in any manner and emerges as a true home garage startup. Due to this news, GAME has not fallen as sharply as MGO, whose fate now rests solely in the hands of those who have been the cause for concern over the past year.
Community members have begun increasingly active talks regarding lawsuits against the brothers to recover the ICO funds and see some justice for the con men that have led on passionate supporters with lies and deceit for over a year. While many members have already dumped their MGO, some are holding out in case a change of heart is achieved within GNation and earlier promises are, at some point in time, finally carried out.