RChain cooperative ‘functionally bankrupt’ after questionable deals, with investors and developers losing faith | A look at TRON and the peculiar way its founder markets the project
|Dec 20, 2018|
“People lose money and they want someone to blame, and they think for some reason I had inside information, and that’s silly. At the time when I sold, everyone thought it would go to $1,000.” — Litecoin founder, Charlie Lee, on his decision to sell his holdings in 2017
The Big Block
RHOC was an investors’ dream. Ranking 30th on CoinMarketCap and led by an all-star team including Vlad Zamfir, the coin was well on its way to stardom as the token behind RChain – the blockchain platform hoping to rival Ethereum. No doubt it stood out among the likes of Tezos and EOS, focusing on implementing the first proof-of-stake validation and eventually hosting multiple decentralized apps (DApps) to address Ethereum’s scalability issues.
But today, RChain is facing a major budgetary shortfall and investor backlash over its alleged financial mishandling, stretching from incomplete balance sheets and the purchase of a million-dollar house, according to documents reviewed by The Block. Not least, management faces scrutiny over a $23.5 million acquisition, for which RChain still owes liabilities of $15m. Meanwhile, its lead developer, Medha Parlikar, quit in October alongside three board members, including CFO, Kate Gonsalves, who resigned on the 7th December. RHOC’s ranking has also dropped from 30 to 211 (accounting for widespread market falls).
CEO Greg Meredith told The Block that RChain’s treasury’s downturn was due to “poor management” by a third-party advisory and “the sharp decline in the crypto market.” But according to four early investors, the problems go far deeper. Several sources asked for anonymity due to potential legal action against RChain, but include members of the Asian investment contingency, who reportedly make up 50% of the total cooperative. They say the group is “very upset” with RChain’s lack of accountability and what they describe as “reckless investments.”
And they want answers.
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Around The Block
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