Paris Hilton has begun to distance herself from the controversial LydianCoin initial coin offering following reports that the CEO of the startup’s parent company is embroiled in potential legal trouble.
Earlier this month, hotel heiress and reality television star Paris Hilton tweeted that she was “looking forward to participating” in the LydianCoin ICO, preempting skeptical comments by adding the hashtag: #ThisIsNotAnAd.
The company set a $100 million goal for its token sale. While far below the record, this is still a significant sum. Luckily for the developers, the endorsement had the desired effect. Hilton’s tweet put the little-known LydianCoin ICO on the map, and the company began to garner mainstream media attention.
However, this media attention has also shed light on some issues the company might have preferred stay hidden. As reported in Forbes, Gurbasksh Chahal–CEO of Gravity4, LydianCoin’s parent company–is entangled in several serious legal situations. Three years ago, he pleaded guilty to domestic violence. He is currently facing jail time for violating the terms of that probation by allegedly assaulting another woman, along with four harassment and discrimination lawsuits from former employees (Chahal denies the allegations).
These revelations have raised ethical questions for many investors, but they also have economic implications. If Chahal does go to jail, there will be a direct impact on the company’s operations. Moreover, Forbes states that three of the former employee lawsuits list Gravity4 as a co-defendant, which could potentially set the company back even further.
Aside from Gravity4’s legal issues, questions have been raised about whether LydianCoin actually solves a problem. By the company’s own admission, Lydian tokens can only be used to purchase services from cloud marketing firm Gravity4. These services can already be purchased with fiat currency, so it is unclear why a customer would go to the effort of obtaining Lydian tokens to purchase a service they can obtain through conventional means–for the same price. In fairness, though, this is a concern raised about a number of ICOs, not just LydianCoin.
Amid this unfavorable environment–and speculation that celebrities who hawk token sales could be held legally responsible–Paris Hilton has quietly distanced herself from the LydianCoin ICO and has deleted her tweets about the so-called “Paris Coin.”
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Josiah is the former U.S. Editor at CCN.com, where he focused on financial markets. He lives in rural Virginia. Connect with him on LinkedIn or email him directly at josiah.wilmoth(at)www.ccn.com.
