L
ike many crypto companies, VirtualStax had a surefire way to generate hype: a roster of celebrities willing to tout its blockchain-based digital trading cards. NFL Superbowl champion Patrick Mahomes, former American Idol judge Randy Jackson, Orlando Magic NBA player Wendell Carter Jnr. — they all endorsed VirtualStax’s cards to their fans. “What I love most about Stax, is that it’s a people-for-people movement,” Mahomes enthused in one video posted to VirtualStax’s YouTube.VirtualStax executives have claimed the project is valued at $15 billion, and found a captive audience among niche groups including megachurch leaders who have poured money into the venture. In February, CEO and founder Rudolf Markgraaff said he is in talks to raise $70 million to fund a “technological revolution that generates income from the most powerful source of renewable energy in the world: Passionate people and their dreams!”
But thBut that heady valuation is one of several statements made by the company that don’t seem to add up. Markgraaff’s VirtualStax — part of a coterie of companies he runs, including a platform to list the trading cards called TheXchange and another that issues TurnCoin, the token that powers VirtualStax — has not publicly disclosed any notable institutional investors. The launch of its digital trading card site in October followed years of delays. And the company’s TurnCoin tokens, which it insists are each worth about $15 — “based on the net present value of future cash (yield) projected to be generated by the VirtualStaX ecosystem” — have never been listed on any major exchange.
Some financials are baffling. According to an internal document seen by Forbes and shared with potential investors in 2019, Stax estimated that it would sign more than 8 million athletes and generate $97 billion in revenue in its first three years — a figure that would ostensibly make it the most successful company of all time (Amazon, by comparison, took 22 years to reach $100 billion in annual sales.)
“If you wanna win, join VirtualStax today.”
Buffalo Bills NFL star Von Miller
Last month, TheXchange was accused of fraud by two people who claim the company owes them $12 million in unpaid royalties, according to a lawsuit filed in Harris County District Court. Shaun Kelley, one of the plaintiffs and a former Motocross pro, alleged that he was offered one million TurnCoin to join the project as a sports ambassador.
Kelley told Forbes he agreed to help the project raise funding after being shown a video that implied LeBron James was involved in the project. (A former TurnCoin employee also independently confirmed to Forbes that Markgraaff implied James was involved in the project). “Everybody got misled,” Kelley said. “They thought LeBron James was in it.”
The company declined to comment on the litigation. During a Zoom call with Forbes, Markgraaff said he would respond to a list of detailed questions Forbes provided after delivering a presentation on his company. “You’re helping people make dreams come true,” he said, clicking through slides. “And you’re connecting directly with the people you want to connect with, like Patrick Mahomes.” He said that $22 million had been raised for the project from individual investors.
