ChainDD Exclusive | Indian Streaming Content Project Spokkz Involved in Repeated Breach of Agreement and Long-Term Loss of Contact

Abstract : In December 2019, Spokkz (SPKZ) was listed on MXC exchange for public offering, and its investors were surprised to learn this news from the announcement because they haven’t received any tokens yet as promised by the project.

ChainDD
ChainDD

Mar 11

Imagine if a project’s community is deserted, its social media accounts disappeared and investors being refused to receive their deserved share of tokens. What if the project altered the token issuance rules arbitrarily and did not inform the investors of the project progress and even refused to return the investment? If this happened then, is this project going to escape?

No, they did not and what is more shocking is that this project has successfully launched in the secondary market and is ready to start its new round of fundraising.

The project mentioned above is Spokkz, in which the initial coin offering was released via a video streaming platform called Spuul in India. In December 2019, Spokkz (SPKZ) was listed on MXC exchange for public offering, and its investors were surprised to learn this news from the announcement because they haven’t received any tokens yet as promised by the project.

Weird Market Performance of Spokkz

As a country with the largest film output in the world and with the rapid spread of high-speed connectivity, the hotspot of India’s film market gradually moves to the streaming media these years. The fierce competitions in the streaming media market between the international media giants such as Disney and Amazon and the local Indian operators are making the Indian local streaming media providers a rapidly improved streaming media technology.

Established in 2012, Spuul was one of these streaming content providers. The platform intended to use blockchain technology for the media content service and release Spokkz to community users as rewards which can be used to subscribe to content with Spuul, including Bollywood movies, TV series, subtitles, reviews, ratings, etc.  

Since its listing on the MXC exchange on December 20, 2019, Spokkz’s market price trends shaped a weird U-type curve. Within a month after the project entered the market, the price fell all the way down to 0.068 USD until January 15, 2020, a decrease of 73%. On January 27, the price of Spokkz raised 78% in a single day and its market began to follow the Bitcoin’s price by February 1, maintaining at around 0.00002660 BTC for more than a month with a fluctuation less than 1%.  

The strange price trends have attracted the attention of many investors. According to the research by ChainDD, although Spokkz was launched on December 20, 2019, its community operation is almost suspended with no one managing the social media accounts or answering the questions of the investors in the Telegram community.

After investigations, ChainDD found that, in addition to the weird price trends, the “missing” Spokkz was also involved in deceiving their investors and repeated breach of agreement.

An early investor of Spokkz told ChainDD that it was since the listing of Spokkz (SPKZ) on MXC exchange that he learned that the project has changed the token issuance rules and he would have to wait another half year to get the tokens as promised by the Spokkz team.

Repeated Breach of Agreement

This investor said that Spuul has promised in the investment contract to conduct the ICO in late August or early September of 2018 and issue the token seven days after the ICO.

But it was 15 months later until December 20, 2019 that Spuul has released its token Spokkz, however, the tokens which were promised in the agreement were still not distributed to the investors.

The 15-month delay on token issuance and the unauthorized alteration to the original token release rule were all done without the investors’ prior knowledge. Besides that, the project also told the investor that Spokkz would not release the tokens in the next six months as the cost for the free listing on the MCX exchange.

A lawyer disclosed to ChainDD that the alteration to the original token issuance rules of Spokkz followed by no updates in the whitepaper, its official website or other social media channels means that the investors did not and cannot even know when and how the token issuance was changed.

Long-Term Loss of Contact

According to an investor who participated in the investment of Spokkz in 2018, the project has stopped reporting the project progress to investors since 2019 and refused any communication, contact or negotiation with the investors in the latter 15 months with various excuses such as they’re on vacation, etc.

It was since 2018, the Spokkz project just answered the investors that the token issuance would be delayed due to the bear market and promised to release the tokens before it was listed on the exchange.

It was because of this kind of evasive answers, the investors were not aware of the changes to the token release rules until Spokkz was listed on the MXC exchange on December 20, 2019.

On February 17, 2020, the phone finally rang from the Spokkz project side and the project said they were driven desperately into a corner and had no money but chose to get listed on MXC. If they return the investment now, they can only declare bankruptcy and if they release the tokens to investors, their tokens will be delisted by MXC.

Refusal to Return Investment

This also happened to other early investors and KuCoin Capital is one of them. In June 2018, KuCoin Capital began its contact with Spuul and signed an investment contract with the project the month, expecting to get the equal valued Spokkz after the issuance of the tokens.

As told by Katrina, business manager of KuCoin Capital, given the fact that the Spokkz project has had repeated prevarication and violation of contracts, KuCoin Capital requires the project to release the tokens in the performance of the contract or return the previous investment to KuCoin as agreed in the contract.

As of press time, the “missing” Spokkz project still has not released the tokens or even returned the investment to the investors and its communities, and other social media channels remain silent.

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