The Civil that promised to create a transparent and democratic model for journalism, not coped with the task.
According to employees 18 American news organizations sponsored by the blockchain startup Civil, the creators of the project admitted that the value of the CVL cryptocurrency can be several times higher than previously thought. However, in October Civil cancelled the public sale of tokens in connection with absence of demand. So journalists can be never receive a token, which the project planned to use as payment.
Reporter Jay Cassano said:
"Despite the claims of Civil on creating a new future for the media, he actually pushes journalists into debt. I refused to work in the news outlet Sludge, which is financed by Civil, because for five months I was paid only 30% of promised. I had to borrow money to pay my rent and student loans".
Civil CEO Matt Iles did not agree with this view of the situation:
"We did not promise anybody that the cost of the tokens will stay on the same level. We made it clear that it is estimates, which can change at any moment."
Iles argues that Civil took steps to discourage the kind of frenzied buying that could have driven up the price of CVL, had the tokens been issued publicly. For example, the project introduced a rigorous know-your-customer process and entered into partnership with the exchange AirSwap, which created a means to restrict access to CVL purchases. However, according to Cassano, Civil recently publicly announced a possible increase in the cost of token from a fraction of a cent to $ 0.75.
One of the anonymous insiders, in turn, said that before the cancellation of the sales of token Civil has declared certain large investors intending to buy back unallocated tokens in order to help a startup to perform tasks. Iles confirmed this information, but added that the project never promised anything.
Following poor sales of token Civil returned to investors $ 8 million. However, the journalists who collaborated with the project, still waiting for proper compensation. It is remarkable that the Iles will have about 5 million CVL after the distribution of the tokens. The exact date of this event is still unknown, because Iles still uses vague language, promising to provide all the information in the coming weeks.
Preston Byrne, a partner at the law firm Byrne & Storm, said that the decision of all legal questions relating to the token depends on the particular facts and circumstances. In the case of the CVL public investors have received compensation, so Civil likely to escape the scrutiny of the United States Securities and Exchange Commission.
However, Byrne added:
"Despite the fact that tokens can rise in price, they are not considered securities, so the project Civil still have to pay money the people who collaborated with him."