So Mycelium is organising a "crowdsale". If you've been in their website you've most definitely heard about it because they're doing their best to get the word out. I'm here to give you the hard truth though, this is quite possibly the worst place to put your money in and most certainly a guaranteed loss of principal. Don't give them money unless you consider it a donation. Here's why:
Part 1
Unacceptable practices:Giving a 10% discount to people expressing interest prior to the sale. You don't have to be a genius to see how bad of a practice this is for securities (note: this crowdsale isn't even a security) that are supposedly representing a stake in a company.
Promising investors part of the money received from future crowdsalesIn their own words:
You get the share of Mycelium and the right to receive money whenever Mycelium gets more expensive. Let's suppose that this time, with this crowdsale, it will be valued at 100 million USD. Imagine that when we sell another portion one year later it will be valued at 1 billion USD. So you will get 900 million USD multiplied by your portion (if you are the owner of 5% you will get 5% of 900 million = 45 million). Your initial investment stays with you: you keep owning this right and it is non-dilutable. The next 20% we sell will be dilutable.
Remember that a Cyprus-based holding company is involved, and Mycelium operations are supposedly Latvian-based. This is a borderline pyramid scheme setup and illegal for securities in most of the world.
Absolutely zero legal fallbackThere will be no refunds. Token is not a security, is not listed, authorized, issued or traded on any regulated market.
No ETA on project rollout
and the creators have no clear idea how it's going to be built or even what it's going to be. You're you would literally be buying a stake in vapourware.
Mycelium's supposed address is a rent-a-desk service's address. part 2
Why this has a high chance of being a loss:First things first, up to this point, could you name anything that Mycelium did that was a commercial success? Their wallet software was free and not monetized, which is nice for users but not for potential
investors. A supposed advantage of this crowdsale is dividends but there's no talk about how they're going to turn in profit.
They are granting themselvs the right to repurchase shares at the initial price.There's no clear plan on how this project is potentially going to turn in profit, but even in the unlikely event that the project becomes profitable, they could buy back the shares at the initial price and end their obligation to
investors.
Can only invest in the wallet but there's no guarantee that the money will be spent on it instead of other projects (that Mycelium won't pay
investors dividends for)
And do I have a guarantee that the collected funds will only be used for the wallet project and not for the rest of the company?
Not entirely, but that's mainly because eventually all of the rest of our company will be rolled into this wallet. Most of the expense will be used to pay Wallet developer salaries, but some of our resources (like office and general brand marketing) are shared, so it would be difficult to keep completely separate. Sorry I can't give a more satisfactory answer.
So fair distribution is entirely based on trust, as well as trading. Yet they claim that
Token owners can either sell them on the open market at any moment or redeem to us if conditions are met, which is misleading at best.
Especially risky when you look at this from a legal perspective:
You're a US citizen, right? Where's your company based/registered at?
For now yes. It's not my company, I am technically just a contractor. It's registered in Cyprus, with the Wallet division registered in Latvia.
My advice on this would be to stay away. It looks bad in every way possible, there's no guarantee that Mycelium have the supposed platform ready or even that they're working on it. Don't fall for their misleading advertising, this looks bad no matter how you look at it. Only send money if you consider it a donation.
