Last year Paragon Coin, headed by the former Miss Iowa Jessica Versteeg teamed up with infamous rapper The Game to raise over $37 million dollars on a cannabis/crypto ICO which ended up being one of the biggest scams in the space.
Paragon’s white paper vaguely laid out how they would use blockchain technology to track cannabis products from harvest to storefront. Farmers and retail locations would sign up for Paragon’s program and the end user would know exactly where their purchased product came from, almost like the 23 & Me of cannabis.
A currency was also to be created where people could pay to use Paragon’s work spaces, the white paper didn’t make sense to many, but some really got on board. Forbes wrote multiple favourable piece detailing the company’s technology and huge future visions.
Unfortunately for investors the whole thing ended up being a huge scam. This was only one of many stories like this.
Red Flags began to rise over the ICO when there was an immediate selloff and the coin lost 75% of its value within the first day. The management team created dummy Reddit and Facebook accounts to combat the barrage of angry investors.
Months prior to the ICO many Redditors had predicted the Paragon scandal. Versteeg had 0 background in tech and nearly all of Paragon’s developers on LinkedIn were from Russia, Ukraine and India with only a couple team members located in the US, one being Versteeg. The company also refused to share any details of their code with the public, they even refused to show a snippet on Github to eager potential investors. The devops manager said that they were building the entire program with Ethereum’s smart contract module, another buzzword and potential red flag.
Many believe there was no code ever written, the entire thing was a farce put on by Versteeg.
The Paragon team is currently awaiting a jury trial.
There Is A Future In Cannabis + Crypto/Blockchain
Stories like these have been rampant and have been ruining the image around cryptocurrency and blockchain. This made the space undervalued as a lot of people have been looking the other way, however, as a portion of the masses have had their heads turned, new advancements have taken place.
This is why we believe the lul in cannabis/crypto deal has taken place, but because of the potential we see this as only being temporary as crypto got too hot and heavy too quickly last year.
The interest in both spaces is massive and each have their respective market fluctuations. There are interesting companies in the blockchain & crypto space who are either looking into working in the cannabis space or are already there. It will be up to these companies to prove that cannabis and blockchain/crypto can benefit each other greatly. There is huge potential to marry cannabis with blockchain/crypto properly, which is why so many of these ICO’s were able to raise millions of dollars.
Next week we will be outlining some of our favourite companies currently doing this, stay tuned.