Initial coin offerings (ICO) are the new ostrich farming.
If your investment memory doesn’t stretch back to the 1990s when people were going to make an absolute motza raising flightless African birds for meat and feathers, paying up to $40,000 an egg, then it’s worth noting nearly half of ICOs sold in 2017 had already fallen over before March this year.
Crowdfunding your business using a cryptocurrency might be all the rage right now, but the corporate regulator, ASIC, raised concerns and earlier this year, introduced a range of measures to protect investors, focusing on the misleading or deceptive conduct risks. The Australian Competition and Consumer Commission also got involved and the scrutiny sent quite a few ICO plans back to the drawing board.
Earlier this week, former Australian cricket captain Michael Clarke went into bat for an upcoming ICO by Brisbane-based crypto trading exchange looking to raise up to $50 million.
Global Tech was founded a little over a year ago by Andrew Mclean and Marlon Donaire.
“The Global Tech Trading Platform and Exchange combines premium education, important industry updates and a social platform, which is sure to revolutionise the way we invest and live. Our mission is to develop, advance and modernise the industry, making it more accessible, transparent and forward-thinking,” is how they explain their business.
Their pitch addresses directly concerns about the sector, declaring that while there are some “fantastic blockchain and cryptocurrency companies… there are also many scams and illegitimate companies”.
That’s one of the problems Global Tech is planning to solve.
“Andrew and Marlon propose to bring legitimacy back to the industry with a community and education-based trading and exchange platform. With their revolutionary vision and entrepreneurial ethos, they spent months tracking down the right people to create the perfect team, and make their vision a reality,” they say.
Celebrity endorsements for ICOs are nothing new. Boxer Floyd Mayweather, actor Kevin Hart, Paris Hilton, and DJ Khaled have all jumped on social media to to plug upcoming ICOs, no doubt lured by they coinage they were initially offered.
Clarke’s endorsement of Globach Tech wasn’t greeted with the same acclaim as his batting.
Twitter, as is its wont, was savage.
His tweet provoked more comments than retweets, the vast majority of them negative.
But perhaps the most damning commentary came from Bronte Capital founder John Hempton (you may know him from the Drug Short episode of the Netflix series Dirty Money), who didn’t hold back, comparing the endorsement to the notorious ball tampering moment that ended Steve Smith’s captaincy during the South African tour earlier this year.
Hempton then went on to blog about it, saying Clarke was “squandering his reputation on an initial coin offering”.
“Whether Michael Clarke is breaking Australian law regarding advertising investments with this tweet I will leave for ASIC and their lawyers to decide,” he added.
Business Insider has contacted ASIC for comment on Global Tech’s ICO, which opens on August 15. The platform is seeking to launch in early December.