The lack of transparency in the ICO industry is not something new, but the creativity is just evolving from time to time.
We have noticed something unusual with Ubex Token Sale recently and as part of our vision in Cointelligence to open the blockchain and crypto industry to the masses and lead an open, transparent, and fair trade, we felt the need to share this with the community.
If you visit the Ubex website, you will see that their token is already trading for 0.017$ at the moment of writing this post.
On the website the token sale is still open and the tokens are being sold for 0.003$, almost 5X, something does not add up, right?
It appears that anyone who is buying tokens at this stage is locked until the end of September or until the hard cap is reached, which means you don’t get the tokens the moment you send your contribution.
If you are looking to find this information on their homepage or on their dashboard where you can find the addresses to make contributions, you won't find anything there.
The main question, is how come Ubex tokens are already trading when the tokens are actually locked? After checking in their channel, their official answer was:
“ We used it to pay partners, and some tokens appeared on the exchange. They were only paid using our own reserve fund”
When asked about misleading retail investors when presenting a lower ICO price than market price the answer was as follows:
“There's no misleading. We only paid a few partners, others will be paid after the end of the tokensale too. The smart contract only allows the community allotted tokens to be distributed after the end of the tokensale, while reserve fund is different”
One more thing that caught our eye, Ubex presenting on their website section called “Why buy tokens now?”
In case you combine 01, 02, and 03, limited supply, high demand, and burning tokens you will get indication of price growth in future, very nice way to convince joy users to buy tokens.
Looking more in depth about the section of burning tokens, in some cases burning tokens would result the token to be classified as security.
The below quote is part of the Legal Opinion Qualification UBEX Token under FINMA ICO Guidelines, published by MME:
“Based on the information available to us, Ubex AG never marketed the sale of UBEX as an investment opportunity. The Purchasers had no reason to expect to buy equity of Ubex AG, to receive any dividends or periodic payments. Therefore, we do not see any signs that UBEX had an objective investment purpose at the point of issue. While it cannot be ruled out that certain Purchasers speculated on an increasing demand for UBEX on the secondary markets, the subjective motivation of the Purchasers has in our view and also in accordance to FINMA’s practise as of today no influence on the classification of UBEX.
Furthermore, Ubex intends to buy back UBEX from the secondary market in order to burn them. However, Ubex is under no obligation to do so. Based on our analysis, we are of the opinion that a sole right to buy back tokens, but under no circumstances an obligation to buy back tokens, does not qualify UBEX as a security. It must be emphasized that FINMA has not yet commentated this issue and there exists no practice in Switzerland regarding the repurchase and burning of tokens” .
On one hand, Ubex is under no obligation to actually buy tokens and burn them, on the other hand they are presenting the burning process as financial model under one of the 4 reasons of “Why buy tokens now”?
For a normal joy user that will land on Ubex he will see the opportunity to buy tokens for almost 5 times less than the market price, though he won't see clearly anywhere on main page or dashboard that tokens are locked and only distributed after hard cap reached or until 30th of September.
Users that made a contribution and only figured out that tokens are locked won’t be entitled to any refund, by the terms and conditions of Ubex under section 23.
Most likely once Ubex tokens will be distributed the price will fall badly and many users will lose money, at the moment theoretically if you buy Ubex you will find the answer for the main question in the crypto industry: When Moon, When Lamboo!
Let me tell you something, NEVER !