Hello Cryptocurrency Community,
ShapeShift.io added support for Paycoin (XPY) a couple weeks ago, upon the request of our users. The coin was quite popular (both for buyers and sellers). The software itself worked as advertised, so we were happy to integrate it.
In general, ShapeShift is “coin agnostic” – we have no idea which digital assets will endure for the long term. If the market is excited about a certain asset, we work to integrate it into our platform, and so we did with Paycoin. We do not “endorse” any coins, nor do we heavily vet the prospects of any asset before we integrate it. We simply listen to the marketplace – unfortunately the marketplace can be a confusing and cacophonous arena.
For the last few days there has been intense scrutiny over Paycoin and its creator, Josh Garza and GAW, with many calling the coin an outright scam.
While we understand that a community which advocates a free and open market needs to be diligent about self-policing, scam accusations are made routinely, often without actual proof or even evidence. People should generally be a little more careful with the word, but we understand why the crypto community reacts so strongly against perceived scams.
And indeed, there are scams out there, and we must all be diligent in building an honest, professional, and productive ecosystem. Looking out for each other is good business.
We’ve looked further into Paycoin, and while there are some criticisms that are superfluous (a coin being “premined” does not necessarily make it a scam, for example), there is one particular issue that we cannot ignore. Josh Garza and the Paycoin admins made a very clear promise – a guarantee – which is that when Paybase opened (a Paycoin marketplace), that Paycoins would be bought there for $20 each. That was a factual promise, made by the creator of the coin.
Anyone who studies markets should know that guaranteeing the price of anything is a fool’s errand. But indeed, if Garza had his alleged $100m in capital he could perhaps back the value of Paycoin at $20 per and actually make good on the promise. It’s unlikely, but possible.
And yet here’s what happened: not only did Garza not fulfill his promise to back the value of Paycoin at $20 per coin, but himself and his administrators seem to be actively re-writing history, scrubbing their forum of any mention of that promise. This moves it from fool’s errand to the realm of deception.
The coin now sits around $5, and Garza is claiming he never promised $20. We believe this satisfies a high threshold of evidence as fraud, and so we have decided to remove Paycoin from www.ShapeShift.io
The market has spoken. We will be at the Miami Conference if anyone would like to discuss this issue further with us.
-The ShapeShift.io Team
Garza promising to buy Paycoin at $20 per (archived since it’s been deleted) https://archive.today/W3OTH
Garza again promising a $20 price (archived since it’s been deleted) https://info.shapeshift.io/wp-content/uploads/2015/01/OVQdmym-1.png
Garza Tweeting a $20 price guarantee http://webcache.googleusercontent.com/search?q=cache:8uqr_DdF00oJ:https:…
Garza’s justification post on Hashtalk after the promise was renegged https://hashtalk.org/topic/26931/xpy-price-floor
To follow our post on Reddit, click HERE
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