Bandits of the ICO Scene: Paragon Coin
Paragon postpones refunds of failed ICO as $463,000 paid to CEO’s husband’s marketing company
Paragon Coin Inc., made history after the cannabis supply chain solutions company were mentioned by the SEC as, “…the Commission’s first cases imposing civil penalties solely for ICO [Initial Coin Offering] securities offering registration violations…We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules…”
In Paragon Coin’s case, their cannabis advocacy ICO raised $12 million from over eight thousand investors. They were fined $250,000 in civil penalties, according to their press release.
Eight Thousand Poor Souls
Despite the crushing civil penalties associated with the SEC fine, Jessica Versteeg, CEO of Paragon Coin, still smiles in recent pictures alongside her husband, Chief Creative Officer Egor Lavrov. A marketing company owned by Lavrov made a reported $463,000 in 2017 from Paragon Coin for “marketing services related to our Token Crowdsale.”
This video, posted on Versteeg’s official Youtube channel with a guest appearance from Egor Lavrov, is an eyebrow-raiser for any potential investor. Nonetheless, eight thousand poor internet souls were blinded by the dual sex appeal of boobs and cannabis. They supported the fundraising campaign for a business that made a reported $54 from total transaction fees on the Paragon Coin platform.
The company has now deleted their Telegram, is reported to have ignored refund claims for their ICO, and has even been begged by the grieving family of Tyler Sash to stop using the story of Tyler Sash’s opioid overdose to market Paragon Coin.
Paragon Coin and Egor Lavrov still gets tagged in Jessica Versteeg’s Instagram posts. Paragon Coin has not responded to requests for further comment.
Even the Technology Was Misleading
Paragon Coin’s ERC-20 Ethereum token offering was part of plan to create a “blockchain solution” for supply chain management in the legal cannabis industry. However, the technology announced by Paragon Coin for their seed-to-sale “software as a product” wasn’t even an actual blockchain. After Paragon Coin announced a partnership with IOTA, the nonprofit has since said, “We aren’t [affiliated with Paragon Coin] and we’ve made this very explicit to them numerous times. If this is continuous we will have to involve our lawyers, because we have made it clear everywhere that we are not partnered with them at all…”
Is There a Silver Lining to This Failed ICO?
To be fair to Paragon Coin, the idea behind the technology is pretty cool even if the implementation is quite lacking. Digitizing even a small portion of the cannabis industry’s largely cash-based economy is a lucrative use-case, especially if tied with the transparency and immutability of transaction records on a distributed ledger. A “seed to sale” tracking system for cannabis supply chains is additionally useful for legal dispensaries in reporting correct supply chain information to the correct regulatory agencies.
If anything, Paragon Coin stands as a testament to inexperienced investors misled by marketing buzzwords, appearance in financial publications with large audiences, and perceived hype. The company’s “Cannabis Co-Working Space” is now up for the sale price of $4,200,000.
