Forgot to mention their association with ASX Ensogo E88 -...

Forgot to mention their association with ASX Ensogo E88 - acquired in a reverse acquisition. Another reason investors may be scared off/share price might be low.

For those unfamiliar with Ensogo

Ensogo – A Brief History

Originally called iBuy Group (ASX:IBY), Ensogo provided the eCommerce of products and services through its websites in Hong Kong, Singapore and Malaysia. It was co-founded by Kris Marszalek (CEO), Patrick Grove (NED) and Lucas Elliott (NED). Both Grove and Elliott continue to have a small interest in RocketBoots through their link to Catcha Group which holds 2.37% of ROC shares. Mr Grove is the CEO, Chairman and major shareholder of Catcha Group. Kris Marszalek would be appointed CEO of iBuy with a salary of $300,000 and short and long term incentives up to an additional $300,000… to run a company that was unprofitable and cash flow negative.

Catcha Group invest in disruptive technology companies around the world with a particular focus on Southeast Asia and Australia. They have investments in Instahome, iMedia, ASX listed Frontier Digital Ventures, Hitchbird and have exited businesses such as iCar Asia, iflix and iProperty Group.

Who is Kris Marszalek?

Early Days

In 2004, Kris started a consumer electronics design studio and grew it to $81 million in annual revenue within 3 years. He would set up local subsidiaries in China and Hong Kong as a result which would eventually lead him to launch Beecrazy in 2010 – an eCommerce platform. Beecrazy would be bought by ASX listed iBuy Group in 2013 for $21 million.

With his track record of success, I wonder how many investors would be smitten at the thought of Kris leading their company?

Marszalek would join iBuy Group as its COO and oversee their IPO on the ASX with the company eventually rebranding to Ensogo Group. Kris would get promoted to CEO of Ensogo in 2014 and step down just 2 years later. During his 2 years at the helm, Ensogo posted a $67 million loss, up 11x from the previous year, and an $80 million loss; all while earning a salary of $300,000 + short and long term incentives up to an additional $300,000. To add salt to the wounds of shareholders, it appears his $2 million loan (to Middle Kingdom Capital Group – a related party) in 2013 was never repaid.

Only days after stepping down, Ensogo would halt its operations in Southeast Asia leaving its platforms customers and sellers stunned and with losses in the hundreds of thousands. That included Beecrazy with sellers claiming fraud and wrongdoing.

According to Viktor of productmint.com:

“What made the whole situation worse – and possibly illegal – was that Ensogo, in April, had announced that it intended to expand its marketplace across the globe after experiencing strong growth in Southeast Asia.”¹

One frustrated customer stated:

"It seems to us that they wanted to make huge business from us one last time before they closed down."²

Marszalek claimed no wrongdoing as it wasn’t his decision, he only had a 3% ownership stake and he didn’t hold a board seat.

Years later, shareholders were left asking why Grove, Elliott and Marszaleks’ zombie company still existed and what was taking so long to liquidate it and return their money? Director Mark Licciardo was asked:

“…why Ensogo chose to spend millions on administrators in Asia when it had apparently severed financial links with the businesses in 2016, Licciardo said he wasn't sure and would need to check. He didn't call back.”⁴

As if things couldn’t get worse, the Philippines Bureau of Internal Revenue (BIR) would file tax evasion charges against Ensogo.⁵

When you consider what Kris would proceed to work on, it’s little surprise he left the struggling ASX listed Ensogo Group…

Crypto.com

Kris then became involved with Monaco, headquartered in Singapore and founded by himself and associates from his Ensogo days - Rafael Melo, Bobby Bao and Gary Or. They would enter the crypto space through an initial coin offering (ICO) nearly a year after his departure from Ensogo. For those unfamiliar, an initial coin offering is essentially an IPO for a cryptocurrency. Over $20M was raised for MCO tokens with the promise of ‘credit cards’ to be issued allowing users to spend Monaco tokens (cryptocurrency) as you would regular fiat. Those cards never materialised despite claims of an existing partnership with Visa³ and never really made sense in the first place – why would VISA undercut itself?

Further questioning the morals of the Monaco team were rumbles on Reddit that Monaco ripped off the white paper from TokenCard, stealing their work and trying to pass it off as their own.

In mid 2018 Monaco would purchase the Crypto.com domain name for $12 million and rebrand to the latter. Shortly after, they announced they would shift their focus from MCO tokens to CRO, planning to conduct a 20 for 1 token swap. The news sank the MCO price and drove up CRO. Exacerbating this was the fact Crypto.com suppressed the MCO price by no longer buying MCO in the open market. MCO holders had already taken a 40% hit when the company had removed smart asset contracts from its roadmap the previous year. As a result, a 0.002% MCO holding would drop to a 0.00001% CRO holding; shafting MCO holders.

None of this would stop Crypto.com from growing into one of the world’s leading cryptocurrency platforms. This is the same company that paid $700 million for naming rights to Los Angeles’ Staple Center, have a 10 year deal with the UFC worth $175 million, sponsored Formula One for $100 million and launched a $100 million advertising campaign featuring Matt Damon and others.

Monaco entered the ICO space at peak euphoria and like many ICOs looks to have taken advantage of a space lacking regulation.