A major Australian blockchain company that rewarded falsified social media profiles has spoken out. The profiles were responsible for spruiking its virtual currency. According to company, they didn’t control the accounts and wanted to improve the reputation of the blockchain industry.
Power Ledger Uses Bounty Hunters To Drive Interest
Power Ledger, an Electricity-trading startup has also been criticised. This is because the company utilized bounty hunters to drive interest in its bitcoin-like currency. The currency had fallen 90 percent in value over the past 12 months. Some investors may have also made exaggerated claims. This due to their need of free allocations of the currency. Also, Power Ledger has attracted the interest of Tesla founder Elon Musk. They have serious plans to revolutionize the retail electricity industry.
Investment In Initial Coin Offerings (ICOs)
Last year, boosted by a 20-fold rise in bitcoin. The initial coin offerings (ICOs) were some of last year’s most attractive investment opportunities. In about 12 months, only a few have developed into successful companies. There are questions asked about the way in which many were promoted to unsophisticated investors. Partner at Deloitte Consulting, Peter Williams, spoke about providing a financial incentive. Also, about providing a bounty, for individuals to promote initial coin offerings which could lead to unethical behavior. According to Williams, these are classic market manipulation techniques.
The Australian Securities and Investments Commission, has set up a unit to monitor cryptocurrency investments. They later said that spruikers should disclose they are being rewarded by the company. ASIC gave an estimate that one-quarter of initial coin offerings may be scams. According to ASIC commissioner John Price, spoke on the matter. To him, just because you call something an ICO [initial coin offering], doesn’t mean it is unregulated. We are focusing on disclosure in this area, he added.
Power Ledger’s virtual currency, is trading about 20 per cent below its issue price. This is fewer than 100 buildings use its trading system. Some were reporting an astounding 5000 likes of our social media output in a single 24-hour period.
Continuing To Pay
The company plans on continuing to pay spruikers who promote its currency. Their worth is about. $2.4 billion at the peak of the bitcoin boom.