Long story short:
- GetGems had VC governance from day one, there wasn't any misuse of funds.
- The validation to this is that very reputable additional investors such as MasterCard, Santander InnoVentures, CommerzVentures, Siam Commercial Bank, SBI Group invested in the company in the round A and round B investment rounds.
- Every one of these investors is exposed to the financials statements of the company and disclosure schedule detailing all the agreements and history of the company. If there was even a slight risk that the company is a scam or that there was any wrongdoing these reputable investors would have never joined.
- Alon was one of the first employees in the company and he left in order to start his own startup which is CoinDash -
there is no connection between the projects.
Some facts:
GetGems was the first ICO in Israel back at 2014, it was also the first israeli crypto company to receive funding from a reputable VC (Magma) with many strong portfolio companies such as Waze, Argos, TabTale etc.
GetGems was also the first ICO to raise funds with a milestone based structure (using Koinify platform). This meant that the project didn't receive the $800k raised instantly but based on accomplishing development milestones that were detailed in advanced. Adam Krellenstein the co-founder of Counterparty and a well respected protocol developer was the arbitrator for the GetGems funds which were held in a multisig wallet.
GetGems built the promised milestones (and a lot of other features) and reached 300k+ organic mobile downloads which was a big accomplishment only few other crypto apps reached at the time, but unfortunately the adoption wasn't strong enough to raise additional funds to keep the project alive as is.
As many startups do in such a situation new ideas were thought out and eventually the project pivoted to become PayKey.
It's important to note that none of the funds raised during the token sale were used to build PayKey rather funds from Magma and additional funds from respected investors such as MasterCard, Santander, CommerzVentures were raised during the Series A round:
https://www.finextra.com/pressarticle/67161/paykey-raises-6-million-in-series-a-funding and Series B funding:
https://techcrunch.com/2017/10/19/paykey-raises-10m-for-its-millennial-targeted-social-banking-smartphone-keyboard/.
Some people don't realize but $800k isn't a lot of money in the startup world, it's about 12 months of operation. If you get a product market fit and traction you might be able to raise additional funds if not most likely you will close the business. A lot of startups with much more money have failed. It's hard to build a real sustainable business.
Working hard and having partial success or even failing eventually is very far from a scam, and is what nearly every real entrepreneur has experienced.
