Australian Crypto Company Rapped for Paying Bounty Hunters for Glowing Reviews

Australian Crypto Company Rapped for Paying Bounty Hunters for Glowing Reviews

Securities commissioners and trade experts have refused Australian blockchain startup Power Ledger a clean bill of ethical health after it emerged that the company paid rogue bounty hunters to shore up interest in its cryptocurrency. The projects powr crypto has fallen 90 percent in value over the past year amidst bearish market conditions.

Bounty Hunters Make False Claims Australian Crypto Company Rapped for Paying Bounty Hunters for Glowing Reviews

Spruikers, sponsored creators of glowing reviews, falsely claimed that Power Ledger, a peer-to-peer electricity-trading startup, had attracted the interest of Tesla founder Elon Musk, and was on a path to revolutionize the industry, in addition to other exaggerations.

According to local newspaper Financial Review, the Australian company rewarded spruikers with free allocations of its powr token, but denies responsibility for their embellishments. Power Ledger chairman Jemma Green maintains that spruikers posted the misleading reviews while operating outside of its control.

Rewards were offered to community members to share our project with their own networks. The means by which they did so were outside of our control, and we made it clear that our core supporters who believed in the project and the future of renewable energy were the main audience for this program, Green was quoted as saying.

However, Australian Securities and Investments Commission (ASIC) head John Price said spruikers, which the company intends to maintain, should disclose that they are being rewarded by the entity. The commission this year set up a unit to monitor cryptocurrency investments.

Australian Crypto Company Rapped for Paying Bounty Hunters for Glowing Reviews

Trade experts also commented disapprovingly on the ethical dimensions of spruiking to boost initial coin offerings (ICOs), a practice that surged in popularity during 2017s crowdfunding mania. Questions have since been asked over the failure of the majority of ICOs to evolve into successful projects with real adoption.

A partner at Deloitte Consulting specializing in technology, Peter Williams, raised ethical concerns over the provision of financial incentives, or bounties, for individuals to promote initial coin offerings, describing these as classic market manipulation techniques.

A Quarter of ICOs Are Scams

ASIC Commissioner Price cautioned that his agency is focused on disclosure in initial coin offerings, estimating that a quarter of them may be scams. Just because you call something an ICO, doesnt mean you are unregulated, he said.

Power Ledger maintains that it deployed spruikers, which it calls community advocates, not only to promote its virtual currency, but also to improve the reputation of the blockchain and cryptocurrency industry.

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Tags: Power Ledger, Bounty hunter, Blockchain, Australians, Review, Australia, Hunting, Elon Musk, Tesla, Inc., The Australian Financial Review