All the Reasons to Be Skeptical About the New TenX Token

[PRIBO247]

TenX, the ICO-funded startup that aimed to let users
spend crypto through a conventional debit card,
announced yesterday that it will distribute a new crypto
token. Holders of PAY, the token TenX sold $80 million worth
of in June of 2017, will be granted an equivalent number of a
new token, simply called the TenX token. That token will,
according to the company, be used to distribute dividends from
fees paid by users of the debit card. The token will be sent to
PAY holders for free, making the new distribution what’s
commonly referred to as an “airdrop.”

In BREAKER’s short life, we’ve found plenty of time to be hard
on TenX. Their astronomical spending rate of $740,000 a
month caught our eye in September, particularly since they’ve
operated for the better part of a year without a functional
product. Then this month, we covered leaked video that
appeared to confirm TenX President Julian Hosp’s history or
training members of the pyramid scheme Lyoness in deceptive
recruiting tactics. Hosp has acknowledged his past
involvement with Lyoness, but says he has “learned my
lessons—and I know what NOT to do anymore.”
Given all that, it’s hard not to view this new token issuance
with some suspicion. But we’ll start with the most positive
possible interpretation of the move.

When the TenX project was first proposed, the PAY token was
supposed to be the vehicle for distributing dividends from
payment revenue. “PAY token holders will receive an incentive
of 0.5% of the entire payment volume on the TenX payment
platform,” according to the initial TenX white paper. But by
December of last year, they had scrapped that plan, because
such a structure would make PAY a security, inviting the
scrutiny of the U.S. SEC and other regulators.

That also appears to be why the new TenX token will not be
distributed to PAY token holders in the U.S.A., China, India,
Venezuela, Iran, Iraq, and a half-dozen other countries. The
new TenX token will also require recipients to go through a
KYC (Know Your Customer) process to help ensure regulatory
compliance. Predictably, holders shut out of the airdrop are not
happy, but the restrictions actually make the new issuance
seem more above board.

Now, time for the less generous interpretation: The new TenX
token is a cynical attempt to further enrich TenX and its team.
TenX tokens, you see, will be distributed to all holders of the
current PAY token as of December 30. That offers speculators
nearly three weeks to buy more PAY, and in turn, get more
TenX tokens. The prospect of the free TenX token has helped
drive the price of the PAY token up more than 17% since
Tuesday’s announcement, compared to a less than 3% rise for
bitcoin at press time.

That benefits all PAY holders, whose tokens are down 93%
from their post-ICO all-time high, and who have weathered a
rising tide of harmful revelations about TenX. At least
according to the company’s Q2 2018 disclosure , TenX itself
doesn’t hold any PAY tokens, but the rally could also benefit
TenX leaders and team members who hold PAY.

TenX will also benefit more directly from the issuance of the
new token. TenX will retain all TenX tokens not claimed by
PAY holders in blocked jurisdictions. Those tokens apparently
won’t receive a revenue dividend (if that ever materializes), but
TenX says listing the new tokens on exchanges is part of its
plan. That means the company will be able to sell its newly-
minted tokens on the open market . In essence, TenX is printing
money and keeping a good chunk of it for itself.

As for the PAY token, TenX assures investors that “we intend
to integrate the PAY token into our ecosystem to perform
various utility functions.” According to the utility token
thesis that underlies the bulk of ICOs, that would mean PAY
tokens would derive value from user demand. But in its latest
announcement, TenX wasn’t specific about PAY’s future
functionality. Moreover, even the theory of utility token value
remains unproven, and has been harshly critiqued by some
very credible analysts.

TenX certainly has some baggage that invites skepticism. In
fairness, though, the company deserves credit for at least
making gestures towards transparency, and its problems
actually delivering its promised debit card can be partially
blamed on factors outside of its control . From that perspective,
there’s certainly a case to be made that the new TenX token is
an honest effort to fulfill TenX’s promises to early investors
while working around a rising tide of regulation.

In these depths of crypto-winter, it’s tempting to default to the
judgment that all ICOs were scams—and a lot of them clearly
were. A crucial task for the next year will be sorting through
what’s left, and separating teams with honest intentions from
those simply creating the impression of legitimacy in pursuit of
an even longer con. TenX is interesting precisely because it
rides that line, and issuing a second token maintains the
ambiguity: it might be craven social manipulation, or it might
be genuinely well-intentioned. Either way, we’ll be keeping a
close eye on it.

Source : https://breakermag.com/