New Trailblazers sponsor faces complaints about crypto swap
BY KERRY TOMLINSON, AMPERE NEWS
JULY 9, 2021
I'm a Portland Trailblazers fan. I've been known to carry a giant cardboard cutout of Blazers shooting guard CJ McCollum's head to games at the Moda Center.
So when I started researching the Blazers' newest sponsor, StormX, as a news reporter, I was hoping for the best.
It turns out, however, that StormX --- a company that offers cryptocurrency instead of cash in its "cash back" shopping app --- has an 'F' rating with the Better Business Bureau.
"If you see an 'F' rating, it should be a huge red flag and you want to dig a little bit deeper," the BBB's Rebecca Barr told me.
So far, StormX --- the first crypto jersey patch partner for the NBA, according to the Blazers --- has not responded to our requests to answer questions. We'll update this article if and when they do.
WHAT WENT WRONG?
The BBB in Seattle, where the Blazers say their new sponsor is based, shows seven complaints for StormX, five of them listed as "unanswered," meaning StormX did not respond to the BBB's requests for resolution.
"It's super-important to know what other consumers have experienced because you're likely to have a similar interaction," Barr explained. "If a problem does arise, how is that business going to react to that issue?"
"Unfortunately, in this case, the business fell flat," she said.
COMPLAINTS
Most of the complaints focus on the company's token swap last year. StormX told its customers who owned the company's cryptocurrency token — a sort of digital money — that it was moving to a new version of that token.
But it wasn't automatic. Token owners had to do it manually. If you missed out on the window, you lost all your money, people said in the complaints filed in February and March of this year.
"When we have tried to reach out, they say, 'Sorry, the swap is closed,'" one customer wrote. "They have scammed millions from their investors. I am just one and I lost about 30,000 and there are many more like me."
StormX responded to one of the other swap BBB complainants saying that the window was open for five months and had to be closed. "Users were notified via email and all social media channels about the STORM > STMX token swap," the message said.
"...[M]ore than 95% of the entire token supply were swapped successfully," reads a StormX blog post.
Up to a few hundred people missed out, according to the StormX website.
MISSING OUT
"Bill Brasky" says he was an early investor in the original StormX token, buying when the company did its initial coin offering, or ICO, in 2017 to raise money.
"For myself personally," he said, choosing to stay anonymous under the name of a legendary Saturday Night Live character, "I could have sold for quarter of a million at one point."
But he, like others, missed the swap announcement. His tokens? Now worthless, he says. He estimates that people lost about $4 million in the swap, leading to heated discussions on social media and accusations flying.
"As far as the company goes, I don't think that they're scammers or that they're looking to steal from people or anything like that. I don't actually think that's their intention. I think they made a poor decision," he told me.
"I just think the way that they handled their token swap was a poor decision and it was misguided," he added.
GETTING HEATED
The swap officially closed in October 2020, but was extended a month, according to StormX. Early in 2021, people with worthless old tokens appeared band together to try to get action.
Some filed complaints with the BBB, some went on social media to put pressure on StormX to re-open the swap.
Some went too far, with one disappointed investor anonymously calling StormX CEO & cofounder Simon Yu a "f-----t" in a small Telegram channel opened for the cause of getting investments back.
Yu then posted a screenshot of the chat on Twitter, saying, "Just an example of the toxicity I have to deal with on a daily basis. 31 people out of millions of StormX users intentionally trying to sabotage the project."
The post appeared to entrench some of his nearly 32k followers against the swap re-openers.
"These are miserable people and always will be. I wouldn’t give them any attention imo," responded @sevengatate. "They had 5 months to swap their tokens. They’re adults who need to be taught a lesson for their incompetence. No sympathy from me, especially after seeing this."
Swap re-openers responded, too.
"We are not trying to sabotage the project," wrote @Dennisilmenace. "If anything we were the first to believe in this project but you robbed us of our money.. Stop the runaround and open the swap, and let's grow together don't alienate your first investors."
RE-OPENING THE SWAP
On March 19, StormX published a blog post saying they were going to re-open the swap, announcing a vote on who would get to participate.
That vote opened July 7 and lasts four more days, according to the website.
StormX says it wants to weed out people may have bought the worthless token AFTER the swap, knowing it was worthless but speculating that it could rise.
"...[W]e had identified that bad actors were purchasing the old STORM tokens and spamming our social channels with hundreds of bot accounts to force a swap to reopen," wrote Yu in a blog post. "They were likely doing this to take advantage of arbitrage between the two tokens and trying to abuse the system rather than using the tokens as intended within the StormX ecosystem."
PRESSURE
Brasky believes the company re-opened the swap after months of pressure from investors like him.
"It should have never gotten to the point that it did, where we felt like we were never going to get our tokens back," he said. "I think they took too long to resolve this."
He wonders why the company didn't keep the swap open indefinitely, to avoid problems like this, or to automatically replace everyone's tokens instead of making people do it manually. It might cost the company money, but it could save hassle and reputation.
"They need to bring on some more experienced people to run their company better," he added.
If he gets his tokens back, he will once again be invested in the company. He hopes StormX succeeds, and believes the crypto "cash back" app idea is an interesting one.
"It's a product that works. It's already being used and it's already working," he said. "How much value long-term is really the question. That is yet to be seen."
GAME ON?
Barr, with the BBB, says it's not too late for StormX to fix the 'F' rating. They can respond to the complaints and resolve the issues with the people who complained, she explained.
It's not the first high-profile business to earn an 'F', according to Barr.
"Every once in a while, we do see them. Especially if they're gaining popularity very quickly," Barr said. "We know that not all businesses are perfect and things can happen."
It hasn't been an easy road for StormX. A former company advisor was arrested and charged in 2019 with extorting StormX during and after the ICO, news reports said. The former advisor also tried to take over the company in 2018, according to reports.
And it's been a rough year for Blazers fans. They want a win on the court --- and on the team jersey.
Some fans won’t care if the sponsor has an ‘F’ BBB rating. Some will. StormX getting people their lost tokens may be the kind of jersey win they want to see.
