$80 Million ICO TenX Founder Linked to Pyramid Scheme: Report

TenX president Julian Hosp has reportedly been implicated in connection with Lyoness, an Austrian discount shopping service that has been declared an illegal pyramid scheme in Norway, Austria, and Switzerland.

After a summer of Chinese whispers on the internet alleging that he was involved in Lyoness before becoming the face of TenX, a video has emerged that appears to show Hosp presenting an online tutoring session used to enable viewers to recruit new participants in the pyramid scheme. The news was first reported by Breaker.

The emergence of the video, if authentic, is particularly damaging not only because of the reputational harm that TenX stands to suffer, but also because the contents of the video point to a damning lack of integrity and a willingness to promote dishonest and underhanded tactics in pursuit of profit. Among the pointers mentioned by Hosp in the video are exhortations for users to exploit relationships with friends and family because they “cannot evade” them, and to hide the real reason for requesting meetings with them. The video also includes tips for evading “annoying questions” about how Lyoness works.

Reputational Damage to TenX

It will be recalled that TenX raised over $80 million in its ICO last year on promises to “make cryptocurrencies spendable anytime anywhere” by connecting bitcoin to the real world with a Visa debit card and banking license. According to the TenX whitepaper, its platform native PAY token would entitle holders to dividend payments generated from use of its cards – a promise which has since been jettisoned. Since 2017, the platform’s basic promise has not been delivered on, with users still waiting for the promises bitcoin-linked debit cards more than a year later.

Questions are increasingly being asked about the willingness or capacity of TenX to fulfill its substantial promise, with some concluding that the company is in fact yet another iteration of an ICO exit scam.

According to reports, Hosp had previously been successful in censoring such material linking him with Lyoness (known as “Cashback World” in the United States), particularly before the TenX ICO. Twitter accounts that shared material discussing his involvement in Lyoness were quickly suspended from the website, and even a message board created to catalogue complaints about Lyoness has been commandeered by the company, redirecting to its U.S. website instead.

Excerpts of Hosp’s tips from the video go as follows:

“Never forget, it is not about telling the exact 100% truth…if you follow this [method], you can earn incomes in an extent that it’s not imaginable to you at this moment…you will never run out of contacts if you follow some guidelines.”

Apart from reputational damage however, this is unlikely to bother Hosp too much because multi-level marketing schemes are not a regulatory priority in the U.S. What will bother him a whole lot more however is the SEC’s current affinity for prosecuting ICOs that sold unregistered securities during the height of the ICO boom last year, one of whom is TenX.

CCN has reached out to TenX for comment and will update this article upon receiving a reply.

Featured Image from Shutterstock

Last modified (UTC): December 9, 2018 1:29 AM

Tags: TenX
David Hundeyin @DavidHundeyin

I am a busy Nigerian writer, journalist and writer with an interest in tech and finance. When I'm not contributing to CCN and traveling around Africa, you can catch me contributing to CNN Africa, or in the writers room at 'The Other News', Nigeria's weekly answer to 'The Daily Show' with nearly 2 million viewers. My work on 'The Other News' was featured in the New Yorker Magazine, and that was then cited in the Washington Post so I'm not sure that counts as a feature but I'll definitely mention it too! I have been nominated by the US State Department to take part in the 2019 Edward R. Murrow Program for journalists under the International Visitors Leadership Program. I also like hamsters. You can reach me on Twitter at _David_Hundeyin

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