Blockchain startup Swarm announced Wednesday that it was to launch new “equity tokens” that they claim would represent equity in notable blockchain startups such as Coinbase and Ripple. The aforementioned firms, however, were quick to disabuse the claim.
The company published a blog post describing their token project, which CEO Philipp Pieper explained in a statement that the tokens supposedly “democratize investing”. He also said that the token would allow “any Swarm investor [to] hold equity in some of today’s most prominent tech startups.”
A spokesperson from Swarm told Coindesk.com that the tokes were company equity either from vested options or from venture capitalists. They explained that the equity supposedly comes from “approved secondary market transactions to acquire vested employee shares, or from venture capitalists who have directly acquired equity from these companies.”
However, when reached for comment, representatives from both Coinbase and Ripple were highly critical of Swarm, and in Coinbase revealed a cease-and-desist order had been sent to Swarm, prompting the removal of all references to Coinbase in their updated announcement.
In their statement, Coinbase said:
“As a private company, Coinbase does not allow trading of stock on secondary markets for a variety of reasons, including the fact that there is not full and equal information available to the market. We will take appropriate action if we find people have sold Coinbase shares in violation of our agreements not to do so.”
While there is no indication that they sent a similar cease-and-desist letter, Ripple representatives were equally critical saying that:
“We have never spoken to Swarm, don’t have a record of them purchasing Ripple equity and would not have approved a purchase for this purpose.”