Substratum decides to trade its Ethereum (ETH) to increase funding using investor funds

Substratum decides to exchange its Ethereum to increase funding, using investor funds

In world of cryptocurrency, there are very few rules mutually agreed upon. However, one of the biggest ways to attract investors' attention is to tell them that you will use their digital resources in a game of chance that may or may not bring more capital to the company. However, it seems background he is doing exactly this.

https://youtu.be/pH2bXT72uTo

In a video posted on YouTube on the official Substratum account, Justin Tabb tackle this new development near the 7-minute mark. He says,

"We are taking full advantage of the trader we have, uh, full time and we are actively negotiating a part of Ethereum, uh, so that we can basically trade in. So we can sell at the top of the bands and buy at the bottom of the bands. And actually, we're not doing anything different than what's in our white paper because we're not doing anything, but we're trading it at Tether of the USD. "

This statement is sufficient to make each user perform a double-take. Basically, Substratum is not in the same place it was during their initial coin offer (ICO) and will use the open market to bring back the capital. While some people will watch the video without concern, this could be a dangerous move for the platform.

First of all, the ability to complete the plan, in the first place, will require extensive knowledge as a trader. Considering the lackluster profits in the cryptographic market lately, holding or withdrawing coins at the wrong time is a major cause for concern. Also, since they are using a trader, it would not be typical for the company to release more information about their "full-time" choice. There is no way of assessing whether the person who literally has someone else's money in their hands is making good decisions. The Zerononcense blog poses further doubts, commenting how a trader with this type of experience is probably not just providing services for companies, but using it for himself.

Another problem is the way To tie it has recently been investigated, especially in the United States. Considering their lack of ability to provide documentation of their holdings, there is the possibility that investor funds may be at risk simply by being tied to Tether in the first place. To add to this concern, Tether does not always maintain a 1: 1 ratio, which means that there may still be substantial losses.

Forgetting these factors for a moment, there's another big problem – although Tabb comments that they're not doing anything other than what is in the white paper, it's not a fact. When it comes to investor funds, the documentation says

"To ensure that the development fund is not subject to large fluctuations in the market, we are protecting it in four ways, thus ensuring that we have the necessary capital to complete each project phase on a budget for the initial offer of Coins (ICO) The capital is divided equally into Ethereum, Bitcoin, USDT and USD Fiat. "

That said, what Tabb is essentially describing is active trading between Tether and Ethereumwhich is bad considering the lack of trading experience on the Substrate team. Moreover, with their inability to properly manage ICO funds and the lack of choice by investors, the company is essentially returning to their white paper without any evidence of being able to succeed.

As far as I know, Substratum has reached about $ 13.8 million in the first ICO, but no details are available on what they raised during the second ICO. The lack of transparency and the apparent lack of sustainability are enough to make some of their investors worry. In the meantime, investors must consider what this means for their personal future with Substratum.