Vanbex Blockchain Consultancy Under Fraud Investigation, Etherparty (FUEL) Crashes
Vanbex group, a consultancy involved with multiple blockchain projects, is allegedly facing an investigation into alleged token sale fraud.
Vanbex, one of the prominent blockchain consultancy projects, is facing further investigations of fraud. Based on reporting by AML Law in Canada, the Vanbex firm had its assets frozen in an investigation of a 2017 token sale, which raised $22 million ($30 CAD) but failed to deliver a usable product. Vanbex, a consultancy firm operating from Vancouver, is under investigation by the Royal Canadian Mounted Police (RCMP) for fraud. The firm is also facing a tax evasion investigation on the side.
The Vanbex project is the issuer of the Etherparty (FUEL) token, promising significant returns from a decentralized ecosystem. But FUEL went on to crash from $0.43 down to lows of $0.007, losing more than 99% of its value in the past year. The FUEL token is seeing most of its trades on Binance, listed back in November 2017. So far, the exchange has not shown readiness to discontinue the token trading. FUEL sees the equivalent of $4.3 million trading each day, as activity picked up in April. Recently, the Etherparty brand changed to Vanbex Labs:
In the past, Binance has delisted tokens involved in problematic or scam activity, as in the case of Centra (CTR).
Currently, Vanbex group is also facing a lawsuit in California, against the group and its co-founders, Lisa Cheng and Kevin Hobbs. The plaintiff, a startup planning on offering a blockchain-related product, is alleging Vanbex failed to deliver consultancy and token sale services as promised.
In the past, Vanbex claims to have helped multiple projects achieve their token sales, back in the 2017 ICO bonanza, but the court documents suggest the company levied high fees while failing to deliver a positive ICO experience. The lawsuit documents show Vanbex charges as much as $80,000 for two months of consulting and promotional activities, which the firm failed to deliver.
Currently, the company’s assets have been frozen during the investigation. What is more curious is that Vanbex has shown interest in one of the hottest areas of tokenization - security tokens. Despite the problems, the group continues to attempt forays into potential activity related to security tokens:
The investigation suggests that the co-founders of the company used some of the ICO proceeds for personal enrichment, buying expensive property and leasing a luxury car. The Etherparty scheme itself has been suspected of being a pyramid, as referral links were circulated through social media, promising rewards for popularizing the FUEL token.