The altcoin slump continues to drive token-encumbered cryptocurrency startups to desperation.
San Francisco-based payments startup Metal, which raised some $3 million in a token sale in June 2017, has been furiously reviving old news, possibly to boost the price of its flagging token, MTL.
At the same time, the startup has been accused by investors—many of whom are on the company’s official Discord channel—of misusing whatever is left of its diminishing winnings to cash out and invest in dubious side projects.
Founded by Marshall Hayner in April 2016, Metal launched on the promise that it would create 66,588,888 tokens, and distribute them across various projects—21,088,888 ($10,544,444) to early investors at around $0.05 each; 3,378,000 to the founding team, for free; and 13,378,888 ($6,689,444) to an app development fund.
In addition, there were two pools of funds that Metal pledged it would relinquish control over: 2,000,000 for the Metal Foundation, which would fund charity projects; and 26,341,112 for a “proof of processed payments pool” (PoPP) designed to reward users for making payments. At their all time high in September 2018, the total funds held amounted to $364 million.
But in April, the price began to sink, and executives at the company began to openly break those promises. After selling off the majority of tokens allocated to him and his team (some $30 million worth), Hayner disclosed in a Medium post that he had appropriated funds from the supposedly untouchable payments pool and the foundation to fund the “core metal team." Metal executives then proceeded to move those funds and sell them on the market.
In the last thirty days, they have sold 2,818,000 MTL tokens, according to Etherscan, pocketing upwards of $1 million and tanking the price for the token’s investors. And in May, the company paid an undisclosed amount for “Crumbs,” a now-defunct micro-investing app Hayner had previously invested in.
Since that time, the token has plummeted by almost 50 percent; from a price of $0.6 in April, it’s now lagging at $0.38.
Now, Metal is apparently doing whatever it can to resurrect its token’s ailing price. Over the past few weeks, the company has been breathlessly re-releasing old announcements—some dating back to 2017—via one of its primary investors, the popular “teen bitcoin millionaire” Erik Finman, leading to brief spikes in MTL’s value.
And it’s worked.
On August 19, for instance, Finman announced the apparent launch of the “Metal Pay” app, positioning it as a competitor to Facebook’s planned digital currency, Libra. MTL’s price soared from $0.30 to $0.34 on the news, but it needn’t have—Metal Payment officially launched in September of last year.
Meanwhile, on August 21, Finman announced that MTL had been listed on Binance, an enormous exchange known for doubling the value of newly listed tokens. Again, the news shook the price, sending it from $0.36 to $0.46—but in reality, MTL had been listed on the exchange since October 2017.
Again and again, Metal promoted old news as new. Finman announced on August 24 that Metal was hiring, but the relevant job listings have been online for several months. And on August 25, Finman announced that Metal was moving into a new office—offices that, according to screenshots seen by Decrypt , the company has occupied since March.
There is also the case of Finman’s supposed “angel investment” in the company, announced last week via Coindesk. But Finman hasn’t disclosed how much he poured in, and one investor speaking to Decrypt suspects the investment was another pseudo-announcement, intended to juice MTL’s price.
With every one of these regurgitated announcements, MTL’s value has sharply increased—before dipping right back down again as more is sold off.
We reached out to Metal, and a spokesman explained that many of the reiterative announcements had been addressed to “new users.” And indeed this is true—for the Binance “announcement,” for instance, both Finman’s video and an accompanying press release addressed these “new users," welcoming them to the app amid “all the press we got this week.” But isn’t the framing of Finman’s tweet—which reads simply, “ANNOUNCEMENT: We’re listed on Binance”—still misleading?
In response, the spokesman just directed us back to Finman’s video.
We asked also about Finman’s “announcement” of Metal Payment, which actually launched late last year. To this, the spokesman said that the original launch had in fact been of Metal Payment’s “beta” service. But the original press release made no mention of a beta launch, and Finman, in his announcement, made no such mention either. Asked about this, the spokesman did not respond for further comment. Finman, too, did not respond for comment.
Of course, running dubious publicity campaigns to boost investor sentiment is nothing new in the cryptocurrency space. So-called third-generation blockchain startup IOTA, for instance, said in late 2017 that it had partnered with Microsoft, when it had actually just subscribed to the tech giant’s online cloud service, Azure. Tron’s Justin Sun, meanwhile, has become something of a connoisseur in the art of desperate publicity, and has been derided for announcing announcements and playing up his tenuous relationships with big-name businesses and investors.
But Metal, as brazenly transparent as its ruse is, makes a fine case study.