more stuff banner.png

Republic Investors Furious After Parastate Raises $8 Million Then Token Plummets 90% in First Week

A very high-profile rug pull on the relatively young platform.

As most people know, Crypto has been at the forefront of modern investing culture for most of recent history. There are the Ethereum’s and the Bitcoins of the world, but there are tons of smaller projects looking to get a taste of that success. With a market cap of over $400bn, even getting a taste of that could make people prohibitively wealthy. On the flip side, crypto can generally be completely untraceable and, as such, has resulted in thousands of blatant scams using the technology. Also, projects in their early years require a significant following and advertising, so if they don’t take off relatively quickly, most die out quickly.


Obviously, this has led to varying opinions about crypto itself being a complete scam in its entirety, to complete optimism around the technology. Within Equity Crowdfunding, there has been tons of debate because they are working in the regulated world of normal securities combined with the unregulated wild west of Crypto. The law is still unclear in many aspects, which means portals are inherently taking risks when they get into this space on both the selling and buying side.


Ad for Whipr portable rower

StartEngine used to be heavy into Crypto but slowly went away from the technology as the risks became too high relative to the payoff. Since then, it seems Republic has stepped up and had an incredibly successful run in the space. They list “vetted” projects and then raise funds from VCs, Retail, and a host of other money sources in these raises, which often results in these companies raising tens of millions for these various projects.


Is the Party stopping?

However, many raises on Republic have become increasingly controversial with a number of high-profile public debacles. Anytime someone's money is involved, and things go poorly, there is going to be backlash. However, Republic does claim all projects on their website are “Highly-vetted” and when this is used to solicit investments, oversites of massive issues can be a big deal.



Investors rely on things like this, and that's specifically why most crowdfunding platforms don’t claim to vet their projects but rather harp on the “Invest at your own risk” mantra. Obviously, all platforms vet the projects and companies on their site but don’t represent to investors its “highly vetted” because when things go south, it can spell legal trouble for the platforms.


One of the biggest debacles prior to Parastate, was Intellivision. Intellivision raised $11.5m from Republic investors and several more millions in pre-orders only for the company to constantly delay production, lose millions in a botched manufacturing deal, and is currently sitting on the brink of bankruptcy.