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Kodak ‘KashMiner’ Deemed A Scam By Critics And The SEC

One of the world’s foremost news sources, the British Broadcasting Company, recently reported that a Kodak-branded “Bitcoin miner” has been found to be a scam by critics and experts on the matter.

According to the BBC article, in January, a Kodak ‘KashMiner’ mysteriously appeared on Kodak’s official stand at the CES technology event held in Las Vegas. The appearance of the miner came amidst rumors that Kodak would be starting the so-called ‘KodakCoin’ cryptocurrency, which the camera manufacturer would implement into its services.

However, it was later revealed that the mining machine, which looks just like a rebranded ASIC (Bitmain ASIC), was actually the product of a firm named Spotlite USA, who licenses Kodak branding to put on its products.

At the CES event, Spotlite told the BBC that it planned to let people rent out the machines for an upfront fee of $3,400, and claimed for the product to make $375 every month for two years. If the advertised profits were achievable, they would total to $9,000 and would result in a $5,600 profit for the renters of the machine.

However, it quickly apparent that the advertised profits were unachievable, as it is near impossible for a cryptocurrency miner to maintain profits for 24 months consecutively. Despite blowback from critics, Spotlite’s chief executive Halston Mikali still stated that the firm will be going forward with installing hundreds of KashMiners in the New York State-based Kodak headquarters.

However, in an odd turn of events, a spokesperson from Kodak flat-out denied the existence of a license for the KashMiner and pointed out that KashMiners were not installed in the Kodak headquarters, stating:

While you saw units at CES from our licensee Spotlite, the KashMiner is not a Kodak brand licensed product. Units were not installed at our headquarters.

KashMiner Critics Speak Up

Many critics were quick to call the Kodak-associated ‘KashMiner’ as a “scam,” due to the questionable nature of the appearance and the unachievable profits.

David Gerard, a writer, and skeptic of the project called the scheme a “crypto-currency folly,” pointing out that the KashMiner website had not even been fully developed, resulting in an unprofessional looking webpage.

Saifedean Ammous, an economist with ties to Bitcoin and other cryptocurrencies, addressed the miner, stating:

There is no way your magical Kodak miner will make the same $375 every month.

Ammous also stated that anyone who made an investment into a miner would have lost money on their investment.

Not only did third-party skeptics criticize the mining move, but so did one of the most influential regulatory bodies in the world, the U.S. Securities and Exchange Commission.

According to the BBC, Spotlite’s Halston Mikali said that the SEC has put restrictions on the firm from moving forward with the project, possibly indicating that regulators saw it as a scam.

However, this has not deterred the Kodak licensee. with the firm stating that it still plans to privately run its mining operation in Iceland, instead of renting out the machine to consumers.

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The Kodak KashMiner's Flashy Debut Ends In Failure

The much-publicized partnership that would have resulted in digital media brand Kodak’s name appearing on a series of bitcoin miners is no more.

Revealed in January at the CES tech show in Las Vegas, the Kodak KashMiner boasted a two-year income projection of $9,000 and required an up-front payment of roughly one-third of that amount. The product debuted around the same time that Kodak inked a still-in-progress partnership that will see its name attached to a cryptocurrency.

Critics accused Kodak of using the KashMiner as a short-term stock boost, with some even calling the product a “Kodak-branded cryptocurrency folly” for its unrealistic claims. According to the BBC, the brand licensee for Kodak LED lighting products known as Spotlite USA had originally intended to label and rent out the KashMiner for consumers but ultimately “the venture was never officially licensed and no devices had ever been installed.”

The news comes as somewhat of a shock given that a representative for Spotlite told the BBC at the time of unveiling that hundreds KashMiners were to “arrive shortly” and add to the 80 already in possession – all in order to meet demand coming from interested miners.

Now, Spotlite’s CEO, Halston Mikail, tells that BBC that the project never got off the ground in the first place.

Mikail told the news service:

“While you saw units at CES from our licensee Spotlite, the KashMiner is not a Kodak brand licensed product. Units were not installed at our headquarters.”

He also reportedly added the U.S. Securities and Exchange Commission put to halt the plan and effectively prevented the Kodak KashMiners from being rented out as originally intended.

Instead, Mikail told the BBC the company would focus on growing its own private mining operations in-house.

Flash photography image via Shutterstock 

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F1 Champ Alonso Adopts KodakCoin Platform for Image Protection

Two-time Formula One racing champion Fernando Alonso is tapping Kodak’s blockchain-powered platform to safeguard his image rights.

WENN Digital Inc., Kodak’s partner in developing the KODAKCoin and a new blockchain system to store and manage image copyrights, announced on June 28 that it had signed an agreement with Alonso to protect both his professional and personal images and videos, according to a press release.

According to the press release, this agreement will make the platform KODAKOne “the exclusive image registration, protection and license-monitoring solution” for Alonso’s images and videos. The system will allow his fans to access the platform, which is not live yet, to upload, register and protect their photos and videos of Alonso while being “rewarded.”

Alonso said in the press release:

“We live in a world driven by content distribution across different channels, especially during such large events as F1 and WEC. I’m very excited to know that I have the ability to reward my fans and professional photographers for their creativity, and that the content they produce can be protected by a single platform.”

Benedikt Dohnanyl, chief commercial officer (CCO) at WENN Digital, Inc, told CoinDesk the partnership has been under discussion for several months, but WENN is not sponsoring Alonso.

“We do, however, have arrangements within all of our agreements that generate revenues for our clients,” Dohnanyl added. He believes the company may begin forging similar partnerships with other clients in the near future.

“We are currently receiving a lot of requests and interest from global brands, content creators and rights holders in these various fields, to whom IP protection is of particular concern,” he said.

Fernando Alonso image via Shutterstock

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KODAKCoin Fundraising to Begin Later This Month

A sale of Simple Agreements for Future Tokens (SAFTs) for KODAKCoin – the forthcoming digital rights token bearing the name of imaging company Kodak – is set to begin later this month.

The offering, which is limited to accredited investors, will start on May 21, WENN Digital announced on Thursday. Kodak licensed its brand to the firm for the project, which involves a digital rights management platform that has its own built-in cryptocurrency.

KODAKCoin and its planned sale were first revealed in January, but an expected start date of Jan. 31 was delayed for what was originally said to be a several-week period.

The SAFTs are being sold at $1 apiece, according to WENN. The company’s intention to sell SAFTs rather than tokens directly was revealed in a paper published back in March.

As explained in a previous CoinDesk feature, SAFTs are investment contracts designed to be sold to accredited investors as a means of funding development, similar to the way equity changes hands in traditional venture capital. In a SAFT sale, no tokens are offered, sold or exchanged – instead money is exchanged for paper documents that promise access to a future product.

WENN said the sale will be conducted through a platform called Cointopia and that it will be managed by Pickwick Capital Partners and Exemplar Capital.

“We are excited to offer the SAFTs and the rights to the underlying KODAKCoin in a manner structured to fully comply with an exemption to the SEC’s registration requirements,” said Jan Denecke, WENN’s CEO, adding:

“Our goal with this offering is utmost security and transparency, working to bring digital tokens to investors by adhering to industry best practices and in a manner that we hope instills public confidence in the crypto space.”

The sale announcement comes days after a cryptocurrency exchange claimed that it was hosting the KODAKCoin ICO, an assertion that a representative for KODAKCoin called “fraudulent.”

Kodak image via Shutterstock

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Fraudsters Take Aim at Investors in Controversial KodakCoin ICO

A representative for the company behind the long-in-the-making KODAKCoin initial coin offering (ICO) has accused a Hong Kong-based cryptocurrency exchange of “fraudulent” behavior by claiming that it will host the token sale.

According to a page on the Hong Kong-based exchange LBank.io, the platform’s ICO section said it is about to open the KODAKCoin token sale on Friday, May 4 at 20:00 Beijing time, or 12:00 UTC, which will end at the same time on May 11.

But platform behind the digital rights management-focused coin first unveiled in January says that isn’t true.

In an email response to CoinDesk’s request for comment, a spokesperson for KODAKOne called the information “neither authentic nor accurate.”

“It has come to our attention that more than one fraudulent websites have been promoting the sale of KODAKCoin. This information is neither authentic nor accurate. All factual information regarding the availability of an ICO to accredited investors will come directly from KODAKCoin and its authorized representatives.”

The rep went on to say:

“To clarify, WENN Digital is only offering the SAFTs and the underlying KODAKCoin in exempt transactions to ‘accredited investors. Offers and sales of the SAFTs and the underlying KODAKCoin outside the United States will also be made in accordance with the laws and regulations of the relevant jurisdictions.”

The KODAKCoin sale was expected to begin at the end of January but was instead delayed for what was initially said to be several weeks.

Most recently, WENN Digital, KODAK’s partner in developing the cryptocurrency, is pitching the sale to be conducted by way of Simple Agreements for Future Tokens (SAFTs), which brands the coin to be a utility token and can only be sold to “accredited investors.”

According to LBank.io’s token sale page, would-be investors can purchase KODAKCoin at a 1:1 ratio with tether or USDT, the dollar-pegged cryptocurrency tied to crypto exchange Bitfinex. The exchange’s page claims that there is a funding hard cap of 8,000 ETH.

Data from CoinMarketCap shows that the LBank.io is currently the ninth-largest cryptocurrency exchange by trading volume in the world, with over $421 million worth in transactions during the past 24 hours.

While LBank.io has not yet responded to CoinDesk’s requests for comments, its website indicates that the firm was founded in 2017 and is currently based in Hong Kong

Kodak film image via Shutterstock

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Kodak Could Earn $5 Million for ICO Brand Licensing Deal

New details have emerged about Kodak’s cryptocurrency licensing deal.

According to the company’s 10-K annual report for 2017, published on March 15, the company was paid $750,000 in cash by WENN Digital, which is developing KODAKCoin and the related digital rights management platform.

Additionally, Kodak received 50,000 shares of WENN common stock, which the report said was worth $1.25 million.

Further, Kodak is set to receive 3 million KODAKCoins following the completion of the yet-to-be-finished initial coin offering, which, as reported previously, was delayed (though a private pre-sale is said to be in progress). Those tokens will be valued one year after they are received, though the total assessed value will not exceed $3 million, according to the filing.

The payments will count as a form of upfront royalties, Kodak said, explaining in the filing:

“The cash, deemed value of the WENN stock, and deemed value of the Tokens serve as an advance royalty to be credited against sales-based royalties in the future … The advance royalty is non-refundable. No future sales-based royalty payment will be due until the advance royalty has been depleted.”

Going forward, Kodak will receive 3 percent of any tokens issued by WENN if the total number of coins is greater than 100 million, according to the report.

In early February, the KODAKCoin team said the ICO was “moving full-speed ahead,” even though “in light of the increased worldwide regulatory interest in ICOs,” the project’s backers were moving to ascertain the token sale’s compliance with relevant regulations.

“This phase will last for a few weeks, after which we intend to sell KODAKcoins to eligible investors,” the team said then.

Last week, the KODAKCoin team released a “light paper” that indicated there are still questions as to whether the regulators will ultimately classify the token as a security, which could lead to trading restrictions following its launch.

Kodak film cartridge image via Lenscap Photography / Shutterstock

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KODAKCoin Backers Warn SEC Could Restrict Token Trading

A new “light paper” released for the forthcoming KODAKCoin sale states that the token could see “significant” trading restrictions should the U.S. Securities and Exchange Commission (SEC) deem it a security.

KODAKCoin – which is being developed by a firm called WENN Digital using the brand of the onetime photography giant, and is set to form part of a new digital rights management platform – is being sold by way of a Simple Agreements for Future Tokens (SAFTs), as detailed in the paper.

Included in the paper is a long disclosure stating that while WENN Digital is pitching the token as a so-called “utility token” – which would, at least conceptually, keep it from being deemed a security by SEC standards – the company acknowledged that the U.S. regulator may make a different determination.

The firm wrote:

“While WENN Digital intends for the KODAKCoin issuable under the SAFTs to be classified as utility tokens rather than securities tokens, WENN Digital will be required to make a final determination of the tokens’ status as one or the other prior to the time that the KODAKCoin are issued pursuant to the SAFTs. In conjunction therewith, WENN Digital may decide to seek formal or informal input from the staff of the US Securities and Exchange Commission. If it is ultimately determined that the KODAKCoin are ‘securities’ for purposes of the Securities Act, the KODAKCoin will be subject to significant restrictions on resale and transfer in the absence of registration under the Securities Act unless an exemption from registration is available.”

The disclosure is a notable one, given that the SEC is said to be probing SAFTs as part of a wider investigation into ICOs.

As it stands, the exact timeline of the sale remains unclear, given recent delays, and the white paper doesn’t include any specifics on that front.

On the project’s official website, a message dated February 5 states that “the ICO is moving full-speed ahead.”

Kodak image via Shutterstock

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Game Maker Atari Is Planning to Launch Its Own Cryptocurrency

The company behind iconic video games such as Pac-Man and Pong is planning to launch its own cryptocurrency, dubbed “Atari Token,” according to an announcement last week.

As part of the effort, Atari acquired a 15% stake in a Gibraltar-based company, Infinity Networks, Ltd and has licensed its brand to the firm. The partnership – which was previously hinted at in a December statement – will see the development of a digital entertainment platform underpinned by the so-called Atari Token. The game maker noted that its investment was “made without cash disbursement by Atari.”

“Our aim is to take strategic positions with a limited cash risk, in order to best create value with the assets and the Atari brand,” Atari chairman and CEO Frederic Chesnais said in a statement.

The name selection is a notable one, given that Atari had previously created an Atari Token to serve as a currency for making in-game purchases. Whether the newly-announced Atari Token will serve that purpose remains to be seen.

Additionally, Atari said that it plans to integrate cryptocurrencies via its branding partnership with Pariplay, Ltd, which offers online games using Atari games and characters as part of their design. Last week’s statement also notably hints at the creation of a second token, which would be used in conjunction with the online casino plan.

“To broaden the appeal of these new casinos, and once the Atari Token available, Atari has the project to launch Pong Token, a second token dedicated to crypto-casinos and usable on these gaming sites. The details of this launch of crypto-casinos will be announced soon,” the statement (loosely translated) reads.

As might be expected, the announcement has drawn comparisons – and not entirely favorable – to Kodak, the one-time photo giant that has licensed out its brand for the creation of a KodakCoin. The project was announced in January, with plans to hold an initial coin offering at the end of that month. That token sale was later delayed, and no launch date has since been released.

As Bloomberg notes, Atari’s stock price saw a noticeable jump after the announcement was made.

Vintage game image via Shutterstock 

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Kodak's Blockchain Pivot Is A Sham, Investment Manager Says

One hedge fund manager isn’t buying Kodak’s blockchain pivot.

In a research report released Wednesday, Kerrisdale Capital alleges Kodak’s blockchain effort isn’t genuine, going so far as to call it “a last-ditch stock promotion gambit for a company hurtling towards bankruptcy.” Kerrisdale holds a short position on Kodak’s stock, and is known for giving strong opinions on public stocks that could move prices.

As reported by CoinDesk, Kodak announced an initial coin offering (ICO) on Jan. 9 in an effort to apply blockchain technology to solve copyright issues faced by photographers. The news was followed by a 37 percent jump in the company’s stock, and a period of heightened performance.

However, in Wednesday’s report, Kerrisdale Capital said its research leads it to believe that Kodak won’t be able to compete with other blockchains startups, because “it’s staring at the possibility of default and a debt restructuring in the next 12-18 months.”

As such, the hedge fund argues that Kodak lacks the technological capacity and the funding to realize its claimed KodakCoin technology and thus transact and store images over a blockchain.

Addressing its separate plans to enter the mining market as well, the firm furthered its argument that the return of investment on Kodak remains questionable.

The report reads:

“Kodak’s cryptocurrency ploy hits all the major buzzwords – blockchain, smart contracts, distributed ledger, ICO, etc. But look through the PR spin, examine the true merits of using blockchain for the proposed service, and it’s obvious the project is poorly thought out and will never work as promoted.”

As of press time, Kodak has not yet responded with comments.

Kodak films image via Shutterstock

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KodakCoin Token Sale Delayed By 'Several Weeks'

The initial coin offering (ICO) for the Kodak-branded cryptocurrency, dubbed KodakCoin, has been delayed.

The public sale was originally supposed to launch on Jan. 31, as previously reported by CoinDesk, following a pre-sale during which 8 million KodakCoins were sold.

Per the statement, the delay is being attributed to an extended process of verifying that those trying to invest are actually accredited in the U.S., meaning that they have a net worth of more than $1 million or an income of at least $200,000.

The statement continued:

“Given the large interest in the KODAKCoin ICO and the steps that we need to take to verify the ‘accredited investor’ status of each interested investor, we expect this process to take several weeks.”

The project is the result of a deal between Kodak and WENN Digital, and is intended to serve as the underlying token for a decentralized photo rights management platform (and as pointed out by Ars Techina, the project appears to be traced to an earlier, similarly-structured project called RYDE coin).

Kodak’s pivot to blockchain led to rumors that the company was trying to take advantage of the current investor atmosphere around other firms, many of which have seen their stocks double or triple after announcing pivots related to the tech. The U.S. Securities and Exchange Commission said last week that it plans to scrutinize such moves more closely.

Market data shows that, in the wake of the delay announcement, Eastman Kodak Co. share prices have fallen. Per Google, the stock’s value is down more than 15% as of press time.

The Jan. 31 statement also warned investors against fake KodakCoin ICO pages appearing on Facebook and other websites, and that investors would not be able to purchase tokens outside the company’s official platform.

Clock in sand image via Shutterstock

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