Sunak, the company behind dodgy NFTs, is now being backed by a dubious organization
The company behind the untrustworthy digital money has now been given a shot in the arm. The result is a fake-free future for cryptocurrency. That’s the optimistic interpretation of events that transpired on Thursday. In a bizarre twist, controversial virtual currency startup Sako Group was quietly acquired by The Digital Currency Group (DCG), a U.S. technology and hedge fund firm. The deal has little to do with digital currencies specifically and everything to do with the general philosophy of the new owners. While Sako has been dogged by publicity over the past six months, The Digital Currency Group’s backers are anything but transparent. It’s a shadowy organization with a dubious reputation and a history of sketchy business practices. Now, with its owner’s reputation intact, the controversial startup is being given a second chance in the crypto world.
The Digital Currency Group
The Digital Currency Group (DCCG) was formed in 2017 by a group of high-net-worth investors seeking to build a strategic investment portfolio of cryptocurrencies and blockchain startups. The DCCG is funded by a small group of investors, including prominent hedge fund manager Mike Novogic, a consortium of European banks and the family of the founder of Hong Kong’s swish EDB bank. The investment portfolio is made up of digital currencies and tokens, but the firm’s main focus is on what it calls “the borderless digital economy.” “We want to make a long-term impact,” said Novogic in a recent interview with CoinDesk.
Sako as a mysterious backer
In early June, reports began circulating that Sako, whose logo prominently features a kangaroo, was in discussions to be acquired by a large financial institution. According to a person familiar with the matter, the Japanese firm has been viewed as a potential acquisition target because of its close ties to the Japanese government. When reached for comment, a Sako official said that the company is exploring all options and would not comment on rumors or speculation. But the Japanese Financial Services Agency (FSA) has previously denied that it is interested in acquiring the company.
And while the acquisition process is ongoing, Sako is not yet a part of the DCCG. The company’s ownership remains in question.
The acquisition was a bad idea
Even before the acquisition rumors were swirling, the plan for Sako looked a bit fishy. It was first revealed that the company was being acquired by a private equity firm known for questionable business practices. That firm has since been replaced as the owner by a shadowy organization called The Digital Currency Group.
When the deal was first proposed, the company’s backers said they would be releasing more information about the acquisition and its deal-related issues. But instead of disclosing basic information about the ownership structure and financial health of the company, the group just quietly bought the company.
The future is fake-free
The first question that investors and stakeholders should ask themselves is: Who benefits the most from the fake money?
Unfortunately, the answer is clear: The owners of the fake money.
The problem starts with the founders of Sako. According to reports, the duo, whose companies were both acquired by BitPay in 2016, promisedediabetic people in the U.S. that they could provide them with a secure and convenient way to purchase medication with virtual currency. Unfortunately, they failed to address one crucial question: If the people who bought the NFTs are unable to access their pills, what difference does it make if they have a secure digital payment method?
Is this the end of Sako?
Sako has been a lightning rod for controversy since it was first revealed that it was the subject of a New York Times investigation. The company has been dogged by publicity over the past six months, most of it negative.
With its ownership now in question and a reputation for being sketchy and unethical, it’s not unreasonable to assume that Sako’s future is in doubt.
The bottom line
The future of virtual currencies is now. Over the past six months, a plethora of reports have detailed the ill-fated and shady practices associated with Sako.
The future of digital money as we know it is uncertain. We could see more and more scams like the ones that have hit the cryptocurrency market in the past six months. The good news is that it’s better to be cautious and invest in quality companies than to invest in low-quality ones.