*I apologise in advance for any linguistic errors in the document as my main language is not English.*
At the beginning of 2020 the professional separation between Sergey Ivancheglo (CFB) and David Sønstebø (aka Triangle) was made public, leaving several common projects in the air, among them Jinn, and with it, all the investors/holders we have trusted them during these years.
This article seeks to demonstrate, with public quotes from David and Come-from-Beyond (CFB), why all the assets held by IOTA AS/Jinn Labs — 81Ti (from unclaimed IOTAS), all the advanced development and acquisitions they have made — should be shared among the jinn holders.
The intention of this paper is to start a negotiation and to reach an agreement with the founders, exposing the facts, from the beginning, in an orderly manner, in order to claim what we consider belong to us fairly and to achive a solution to what, until now, has been a scam towards the investors.
The Ico and the following months
We start with the announcement of the new project by Come-from-Beyond and David Sønstebø on Sept. 23, 2014: Jinn, “the first modern general-purpose ternary processor”. According to CFB, something between an Intel CPU and a Nvidia GPU. Since the begining CFB takes on a technical role and David a more communicative one, hence most of the quotes are from David/Triangle.
100,000 assets out of a total of 1,000,000 would be sold, giving the holders of the asset a right to the profits generated by the sale of these processors, although, as we see in the following statement from Triangle, these investors would obtain income much earlier, with a game and jiniri unlimited (these projects never carried out). In another statement, as we can see, it is clarified that “any sort of acquisition or exit strategy were to be employed the asset owner will continue to get 10% profit (by contract)”. We can read, “the assets are like preferred stock share of the company”.
On October 1, 2014, the initial sale took place and the 100,000 assets were distributed among the investors, who were the first to finance the project. Time passed and, although little by little, the team was giving updates at https://nxtforum.org/news-and-announcements/(ann)-jinn/ . The jinn token was traded on the NXT asset exchange.
Iota – Jinn swap
We arrive at November 2015, when it is offered the possibility to swap the jinn tokens for a software they, the team, are developing to run into the ternary hardware and would have the same functions that a cryptocurrency. There are three key points in this offer:
- Swap was an option for those who were not willing to wait years to see the benefits of jinn hardware, as seen in David’s following statements. It was not mandatory and was never an alternative proposed by them to comply with legal conditions, or “make things right”.
- The proposal offered was to exchange the jinn tokens for cryptographic software that could be used as cryptocurrency, but they did not sell it as such, and they did not know if it could be sold in exchanges. At the same time they kept developing the processor without any major complication that would have jeopardized the project. If that had been the case, it would have been easy for them to make the swap mandatory and forget about the jinn holders forever.
- This software is developed by the same team with the same company. Software is required for the hardware’s operation. In the next statement from november 25, 2015, we can see that they recognize “JINN tokens was sold by Triangle (our company, now renamed)”, renamed to IOTA AS (IOTA AS was established on November 23, 2015, https://w2.brreg.no/enhet/sok/detalj.jsp?orgnr=916476965).
At that time people made their decision with the information they had. The terms of the IOTA sale reflected that if the buyer did not claim the software by a specific date, the tokens would come back to the team’s possession, this meant that the team took control, at least, of 81Ti (as we will see later) and the IOTA project, and then Iota Foundation, started.
Regarding jinn, everything was going as they had planned and at some point they said that the jinn holders would have to pass a KYC process to legally comply.
Split and exit scam
When CFB and David decide to separate their paths and put an end to the jinn project (Feb. 2020), it becomes public, due to private conversations leaked by CFB, that IOTA AS, the company owned by David created to develop jinn, which they have publicly referred to as Jinn Labs, owns 65Ti (of the 81Ti recovered from the initial sale).
When David, representing Jinn Labs/IOTA AS, is asked about what is owed to jinn token holders as the sole investors, he said this:
“Jinn holder’s aren’t owned anything. How would they be? They had the right to potential sales of Jinn processors as the agreement clearly stated back in 2014”. It is obvious that you can not make an ICO promising profits from a processor’s sales and then run away with the company’s funds and hide behind the fact that there have been no sales. It is called scam. Even more, we have seen before, they promised 10% profit on any sort of exit estrategy.
He claims that all the initial jinn investors have made “tons of money” with the swap, which is not true. As we have seen before, the swap was not mandatory, rather an exit for those who did not want to wait several years and only 42% of the jinn in circulation made the swap (see triangle account in NXT explorer). At that time IOTA was worthless (as software they sold, it still doesn’t have much use today), so we had to trust on them with IOTA or with jinn.
He also wonders how they have been able to earn anything, CFB or he, with a few hundred thousand dollars from the ICO, but, as we have seen, they developed IOTA, the software required for jinn hardware, recovering 81Ti for the company. Early this year, CFB suggested that David bought, for his own benefict, IOTAS in IOTA sale with Jinn Labs funds, and then he returned these funds, but we don’t have evidence about this.
In these other quotes, he claims that even he does not understand how jinn, Jinn Labs, IOTA AS are organised and says again that they offered the swap with IOTA to make things right and that they also warned against buying the asset. As we have seen before, the swap was offered for other reasons that have nothing to do with this and they never reported that the trading should be stopped, on the contrary, they continued to claim that everything was fine in the following years.
Regarding the connection between Jinn Labs and IOTA AS, now he claims that they are unrelated, but they have always said that IOTA AS is Jinn Labs, as we saw in a quote above, and jinn tokens were sold with this company, so the funds in IOTA AS are the funds in Jinn Labs. In these interventions (see quotes below) David acknowledges that he owns 100% of Jinn Labs and CFB 0%, they donated money from Jinn Labs to the IOTA foundation and therefore CFB owes him 13.5Ti.
Conclusion
According to updates and announcements made public by the team, we have:
- Funds are raised to finance the jinn project. Jinn Labs is how they call the company in charge of the development and then is legally established as IOTA AS.
- Jinn Labs creates the IOTA software as a requirement for the hardware operation and offers to holders who do not want to wait for years, for the completion of the hardware, the possibility to exchange their jinn tokens for this cryptographic software without any initial use or value.
- Due to the conditions of the initial sale of the IOTA software, Jinn Labs/IOTA AS recovers around 81Ti unclaimed in different phases.
- The founders of the project decide to separate their paths, without any processor developed, keeping all the funds of Jinn Labs/IOTA AS in their possession*, without rewarding the initial investors, or holders, although they promised this from the beginning.
*CFB agrees to share the funds with the holders, but David has control of them and he refuses.
Thanks to promises, they raised money from investors, developed the software required for jinn processor, this software increased its value and they decided to stop the hardware project and keep all the company funds without rewarding those investors who financed the project from the beginning, even when they clearly said, as seen before, jinn tokens represent “preferred stock share of the company” and “any sort of acquisition or exit strategy were to be employed the asset owner will continue to get 10% profit (by contract)”. So, in this exit estrategy, Jinn holders have a right of the profits generated by IOTA AS.
Privately, with a few investors, we are coordinating with lawyers the way to proceed to claim what we consider to belong to us in a fair way, in case the founders of the jinn project refuse to negotiate with us as a group of affected people.
If you are one of those affected and want to join this demand, please contact us through this telegram channel: https://t.me/jinntalks
