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The curious case of Monaco

The curious case of Monaco

The much maligned Monaco has had one of the stranger starts to life in the cryptocurrency world. Launched at very short (less than one days) notice, the project has since inception  been plagued by a general consensus that the project is a scam. Claims seem to centre around 3 or 4 general themes:

  1. The CEO, Kris Marszalek, was CEO of Ensogo and founder of Beecrazy, two previous ventures that went bankrupt
  2. The ICO launched with a days notice and is a copy of other projects
  3. They have 'claimed' VISA partnership at various junctures without having VISA officially on board
  4. They have missed deadlines to announce the aforementioned Visa partnership
  5. I have never put too much stock in most of these accusations, as I think all of them are fairly easy to explain once you dig into them. My concerns mostly centred around the heavy discounts for early buyers (up to 50%) and their misleading labelling of the card as the Monaco VISA card clearly well before any agreement was actually signed. There is no question that the advertising prior to the ICO consistently referred to the "Monaco VISA" card whereas all subsequent literature referred to the "Monaco" card. In an effort to clear this up, Kris gave the following answer in an UrbanCrypto interview: 
We have a signed deal with a principal issuer of VISA; as long as we comply with their program rules, we will stay there – to be clear that means we will not be doing crazy stuff like some other crypto cards out there – we will have 100% KYC on every single customer who wants to open an account.
— — https://urbancrypto.com/monaco-visa-answers-ceo-kris-marszalek/

Regardless of the issues, the project continued and early ICO investors were rewarded generously as MCO soared from c. $2 to a peak of over $25, before rapidly retreating near to its current level ($7.4 as of today). The price has oscillated in the high single digits for the past 6 weeks as the firm continues to tease a formal agreement with VISA that would make them an official partner. 

Unfortunately for buyers, twice this deadline has come and gone without any further news. The most recent deadline (18th October) was missed, prompting a 20% plunge on the day. Yesterday Kris gave the following answer in a Slack discussion:

Q: Is it still only the US partner you are waiting on?

A: Yes

Q: What's taking so long, when you exactly know what to communicate but need someone to make sure there's a dot on every i it shouldn't take a entire week.

A: Comms & legal do take their time to review. I agree with you it should not take as much as it is taking, but large corporates have their way of dealing with things.

Having worked in a large corporate, I can believe that the process of signing off a press release could easily be subject to these sorts of delays. What is inexcusable in my mind is:

  • Setting a deadline you aren't 100% sure you can make
  • Poor communication to investors as to why a promised deadline is not being kept to

The correct course of action would have been to post on the 18th (or ideally the 17th) that there was a delay and that they are working to resolve the issue as soon as possible. By providing no explanation at all it leaves the market more open to manipulation and causes panic sell offs, as well as leaving the Monaco team looking amateurish. An announcement should have been made on their Twitter account, rather than through a discussion on Slack, which most token holders will not use regularly and so will not have seen. It is a curious lapse because the image portrayed by Kris in the NeoCash interview in September was one of a highly professional CEO who understood the importance of communication. 

However, assuming Monaco does get VISA approval (which I believe they will - the main worry for me is they don't get the 'full' VISA Program Manager status they are seeking and have promised but instead get a watered down version) there is no doubt that the token is highly undervalued. Monaco currently sits at 70% off its ATH and at $80m market cap is 2.5x and 2x smaller than competitors TenX and Metal with what I believe will be a superior product. I have not added to my position but I am more than content to hold my stake (c. 5% of my total portfolio) and look to sell on the surge in price that will follow any announcement. 

Disclaimer: I hold 5% of my portfolio in MCO as of today

Update as of November 8th: I sold out of MCO to move back into ETH. I still think MCO could be a solid project, but there are better options for appreciation at this point. The way the Visa reveal was handled, however, shows that the team does not understand how to communicate with investors which is a real worry in a space so driven by hype and spin. 

Introduction to cryptocurrencies (Part 1/4)

Introduction to cryptocurrencies (Part 1/4)

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Common mistakes people new to crypto make