Category Archives: blockchain

Embezzlement or securing? Battle over the match pool ICO

Funds worth about 1.500.000 EUR are said to have disappeared from Matchpool. A co-founder makes heavy accusations and leaves the project.

Some time ago we reported about the Matchpool ICO. The goal of the project is a blockchain-based Tinder app – dating on the blockchain. Specifically the basis for a kind of own dating application is to be laid, in which possible payments are regulated by Smart Contracts.

The project was financed by an ICO. Tokens called Guppy or GUP were sold via this ICO. The goal was to sell 60% of the existing Guppy tokens against ether in this Initial Coin Offer – a goal that was achieved very quickly. A certain demand in the community is therefore clearly visible.

Now, however, controversies arose

The CEO is accused of having stolen more than EUR 5 million from the Multisig account at ETH Zurich, which was connected with the discovery.

This unannounced coin movement confirms the concerns of those who have criticized Matchpool from the outset. Even more dramatic is that Philip Saunders, one of the co-founders, made this coin movement public and declared his withdrawal from the project.

Coin Movement for Security: Matchpool Explains Itself

In a blog post on Medium Yonatan Ben Shimon commented on the accusations and the quarrel with co-founders. Regarding the accusation of embezzlement of funds, reference is made to an earlier blog post in which Matchpool explained its risk management strategy: Since the volatility of Ethereum is higher than that of Bitcoin, it was considered sensible to invest part of the money in the more stable Bitcoin in order to hedge the funds. The Bitcoins acquired should be secured on a Trezor Cold Storage.

Regarding the exit of Philip Saunders, the view of Yonatan Ben Shimon is presented. According to him, Philip’s interest has waned. In addition, his work – apart from writing the white paper and implementing the necessary smart contracts – is said to have been rather inadequate, so they wanted to complement the team with more talented developers anyway.

According to Yonatan, after the ICO Philip Saunders wanted to retain his share of the funds he had acquired – which he was denied. This refusal finally led to the current drama about the withdrawal of a co-founder.

So we see that in the aftermath of the ICO there are different sides throwing dirt at a team in dispute. Funds were generally moved, but not in the aforementioned size. The reason is understandable that some people see some red flags here, especially with the money supply at stake – the history of the ICOs knows its scams.

However, the CEO deserves credit for quickly responding to the accusations and for pointing out that something had been planned to minimise the risk anyway. In any case, we will continue to monitor and report on the Matchpool case.