Business 6 September 2018Dan Taylor
Malaysia’s securities regulator shuts down celebrity beauty ICO
The chief securities regulator in Malaysia has called an immediate halt to trade in the Lavidacoin (LVC), a cryptocurrency recently launched by one of the country’s foremost beauty gurus.
The Securities Commission of Malaysia announced the halt in a statement published on their website, where they confirmed they had suspended transactions in the cryptocurrency pending a more thorough review of its structure.
According to local media reports, the cryptocurrency is the work of beauty guru Datuk Seri Hasmiza Othman, also known in the country as Dato’ Vida. Recently launched as an ICO, Dato’ Vida had hoped to raise up to $1.5 billion from early backers, which would be used to fund online entertainment content for entrepreneurs.
The plans also included a payment gateway for LVC transactions, alongside a not-for-profit mosque, as detailed in the accompanying white paper.
However, the proposals were not long in attracting scrutiny from the regulator, which has voiced concerns over how the ICO has been sold.
Chief amongst the issues identified by the Securities Commission is that the ICO promotion may be in breach of Malaysian securities laws, which led it to publish a warning notification to potential and existing investors.
“The SC advises investors to exercise due diligence and to be cautious of the risks of participating in any investment schemes, in particular schemes involving cryptocurrencies and digital tokens,” according to the commission.
In a second statement issued on Wednesday, the Securities Commission highlighted several entities alleged to have been involved in the token’s sale, with three organisations—DSV Crypto Club, LUX Galaxies, and VI Profit Galaxy—now added to the commission’s ‘investor alert list’ as a result of their backing for the ICO. As noted in local press reports, all three of the companies involved have been blacklisted by Bank Negara Malaysia over the last few weeks.
The news is far from the first time celebrities have been involved in promoting ICOs, often with embarrassing consequences. Floyd Mayweather ran into difficulties when an ICO he had backed ran aground, while the likes of Snoop Dogg and 50 Cent have stuck to more established paths.
Amongst those to have launched cryptocurrencies in their own image are former Liverpool and England footballer Michael Owen, who launched his OWN coin to a muted reception earlier this year.
With Dato’ Vida’s ICO now the latest to hit the rocks, it remains to be seen whether celebrities will be more cautious when launching their own similar ICOs in future.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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