In the latest sign that the market for initial coin offerings has probably peaked, Bloomberg is reporting that a company is planning to launch an ICO with the explicit goal of raising enough money to purchase the only extant copy of “Once Upon A Time In Shaolin”, the rare Wu Tang Clan record and current record holder for most expensive single album ever sold. Martin Shkreli once paid $2 million for the record.
Behold Wu-Tang Coin, the digital token at the heart of a purported ICO whose sole purpose is to raise money to buy and publicly release the Wu-Tang Clan album that convicted fraudster Martin Shkreli once spent $2 million on.
The coin launched Monday, according to its Twitter account, which has a whopping 13 followers. Rare Music Ltd., the company behind the efforts, is seeking to raise $3 million to $4 million, according to a white paper listed on the internet. Because of its decentralized nature, the creators of Wu Tang Coin claimed in a White Paper that an ICO would be able to circumvent legal restrictions barring the owner from publicly releasing the album for commercial purposes until the year 2,103.
The goal of the project is to release the album for free on the internet. The company says coin holders will be compensated with "gifts" to incentize participation.
A straightforward purchase of the album by a music company would be pointless because the album cannot be “commercially exploited” in a reasonable amount of time. Therefore, we propose to:
1. Raise funds via an ICO and attempt to negotiate a purchase with the album’s current owner.
2. Give Wu-Tang Coin donors to the ICO (i.e. owners of Wu-Tang Coin) gifts to incentivize participation.
3. Release the album on all free and paid streaming music sites after a short amnesty period (six months) designed to give owners of Wu-Tang Coin time to enjoy the album exclusively, before everyone else.
As we reported earlier this month, the ownership of the Wu Tang album is in doubt after Shkreli sold the album on eBay for just over $1 million – about half what he paid for it in late 2015, shortly before being labeled “the most hated man in America” after his former company, Turing Pharmaceuticals, raised the price of Toxoplasmosis drug Daraprim by 5,000%.
After being convicted on three counts of securities and wire fraud after the conclusion of a month-long trial in Brooklyn Federal Court, Shkreli"s bail was revoked shortly before the auction ended and he was sent to a notorious federal jail in Brooklyn to await his sentencing in January. Prosecutors asked that his bail be revoked after a published what he described as a satirical post saying he would pay a $5,000 bounty for a strand of Hillary Clinton"s hair. It"s unclear what will happen with the Wu Tang album.
“The most hated man in America” is going to prison over a joke.
Late Wednesday, Brooklyn Judge Kiyo Matsumoto ordered that former Turing Pharmaceuticals CEO Martin Shkreli’s bail be revoked after prosecutors claimed that a Facebook post published by Shkreli on Sept. 4 was tantamount to an invitation to assault on Hillary Clinton during her upcoming book tour. In a letter demanding a bail hearing, the former hedge fund manager was described as a “threat to the community.”
Matsumoto, who presided over Shkreli’s trial which resulted in convictions on three out of eight counts of wire and securities fraud, said she would not be swayed by the defense’s argument that the post was a harmless joke and that Shkreli didn’t intend to harm anybody. Instead, the Judge revoked Shkreli’s $5 million bail and ordered him directly remanded to jail pending his sentencing, according to the Daily News. No date has been set for his sentencing.
Shkreli told the judge, prosecutors and secret service agents who asked to interview him about the post that it was intended as satire. In the original post, Shkreli offered $5,000 for a strand of Hillary Clinton’s hair, claiming that he would have a DNA analysis done to confirm “that the Clinton Foundation is willing to KILL to protect its secrets.”
See the post in question below:
Since being unceremoniously thrust into the public eye in late 2015 when he was labeled “the most hated man in the world” after his company, Turing Pharmaceuticals, hiked the price of Daraprim, a drug that treats toxoplasmosis, by 5,000%, Shkreli has made a habit of publicly antagonizing lawmakers, prosecutors and judges. True to form, Shkreli took to Facebook to blast prosecutors immediately after the hearing.
Notably, Shkreli is being thrown in jail one day before the close of Shkreli’s auction of the only copy of the Wu-Tang Clan “Once Upon A Time In Shaolin” which he purchased for $2 million in 2015. Bidding has topped out at $1 million in recent days.
In their initial request, prosecutors tried to paint Shkreli as a serial harasser of women, citing his ban from Twitter earlier this year, allegedly for harassing Lauren Duca, a freelance writer who had authored an opinion essay that criticized President-elect Trump. The day before his verdict, Shkreli wrote in a Facebook post: "trial"s over tomorrow, b****. Then if I"m acquitted, I get to f*** Lauren Duca."
Shkreli edited the Facebook post after it was first reported in the media, clarifying that the post was meant as satire. Though he says he agrees with Democratic policies, Shkreli sided with President Donald Trump during the election after expressing a frustration with PC culture.
In his sentencing, Shkreli could face as much as 20 years in prison, and although a much shorter sentence - if any - had been expected, today"s latest snafu may have just cost Martin dearly.
Prosecution called its first witness in the trial of former Turing Pharmaceutical CEO Martin Shkreli on Thursday. The witness, a former investor in one of Shkreli’s funds, alleged that Shkreli misled her about the fund’s performance, touting returns that were “too good to be true.”
The witness, Sarah Hassan, told jurors that she invested $300,000 with Shkreli in 2011 after being told he was “a rising star in the hedge fund world” who managed $40 million. She said she was thrilled when Shkreli reported she made nearly $60,000 that year alone, according to the Associated Press. However, she said those returns far overstated Shkreli’s performance; in fact, the fund lost money. A year later, Shkreli told her that he was using all the assets in the fund to start up Retrophin. When she tried to get her investment back, he stalled for months before forcing her into a settlement that included shares of Retrophin and $400,000 cash, she said.
Day 4 of #Shkreli trial underway. First witness, Sarah Hassan, 27-year-old daughter of Fred Hassan, just took the stand. Govt questioning
“To hear over a year later that the cash was gone, it was upsetting,” Sarah Hassan testified as the first witness at Shkreli’s securities fraud trial in federal court in Brooklyn. “I saw that as being my cash. It was just not right.”
"To be frank, I felt somewhat betrayed at this point," Hassan, 27, told jurors in Brooklyn, New York, federal court. "I was told I could get my cash from the fund months ago."
It’s unclear whether Hassan is the same government witness who was allegedly threatened by a member of Shkreli’s family, as Bloomberg reported last week.
The defense has countered that the federal government unnecessarily frightened three of the defense’s witnesses after FBI agents repeatedly tried to contact them. *** The Shkreli trial is just getting started, but already there have been more than a few interesting twists. The trial was supposed to begin Monday, but, thanks to Shkreli’s reputation as “the most hated man in America,” the jury selection process consumed two full days as the defense meticulously interviewed 250 potential jurors, with many claiming they would be unable to issue a fair judgment thanks to Shkreli’s reputation as the “pharma bro” who hiked the price of lifesaving AIDS drug Daraprim by 5,000%.
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MedCity, a pharma blog that"s covering the trial, published a ranking of the top five excuses potential jurors used to get out of jury duty - one juror was excused for saying Shkreli "looks like a dick." Another said he couldn"t be impartial because Shkreli "disrespected the Wu Tang Clan."
“In my head, I said, ‘That’s a snake,’” one woman told attorneys, perhaps the most iconic comment to date.
“Honestly? Because he kind of looks like a dick,” another juror said more bluntly, explaining his bias to the judge. The individual was reportedly familiar with Shkreli’s ownership of the sole copy of the Wu-Tang Clan album “Once Upon a Time in Shaolin,” purchased through an online auction in 2015 for $2 million.
“He disrespected the Wu-Tang Clan, so…” On a related note, CNBC reported that on day three a potential juror also brought up the issue and the aftermath, in which Shkreli leaked the record.
“In this particular case, the only thing I’d be impartial about is what prison he goes to” — another gem from day three.
And finally; “I am,” from the man Judge Matsumoto asked directly “Are you concerned for your safety?”
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However, in a sign of hope for the embattled Shkreli – who is facing up to 20 years in prison if convicted - defense lawyer Benjamin Brafman has hit upon a novel defense strategy, according to the New York Times.
Brafman, a celebrity criminal defense lawyer known for representing Sean “P Diddy” Combs, Charles Kushner, and former Mafia boss Sammy the Bull Gravano, is claiming that much of the public’s hostility toward his client stems from Shkreli’s odd behavior, which he implied could be related to his client being mildly autistic - though it"s unclear if a doctor has diagnosed him as such.
They’re calling it: The “Born This Way” defense, after the 2011 Lady Gaga hit single celebrating LGBTQ youth:
“An odd duck. Perhaps Autistic. Weird. Maybe with Asperger’s. A guy who shuffled around his office in bunny slippers with a stethoscope around his neck because he felt comfortable that way. This is how Martin Shkreli was portrayed on Wednesday for his trial on fraud charges – by Benjamin Brafman, his own lawyer.
“Is he strange? Yes,” Mr. Brafman said of his client. But he added, “every single government witness will concur that Martin Shkreli, despite his flaws and his personality, is brilliant beyond words.”
Brafman also pushed back against the defense’s claims, arguing that none of Shkreli’s investors lost money. In fact, Brafman told the jury they made money thanks to Shkreli’s financial prowess.
Shkreli is being tried on eight counts of securities fraud and wire fraud related to his time running two hedge funds, MSMB Capital and MSMB Healthcare, and a pharmaceutical company he founded called Retrophin.
In particular, Shkreli has been accused of falsifying investor statements, backdating documents and misleading investors about his record as a fund manager. He also allegedly misstated how much money was in the funds, according to prosecutor G. Karthik Srinivasan, who, in his opening statement, accused Shkreli of being a “con man” who managed to convince his investors that he was “a Wall Street genius.”
Prosecutors alleged that the string of events that led to Shkreli’s arrest began with a bad trade at his first hedge fund, MSMB Capital. Shkreli lost millions of dollars on a trade that put the fund in the red.
Around the same time, Shkreli founded MSMB Healthcare, a second fund, and Retrophin, a pharmaceutical company. Shkreli allegedly told his investors they could have their money back in cash or Retrophin stock, and when a couple of investors threatened to sue, Shkreli hired them as consultants at Retrophin.
“Retrophin owed these investors nothing – the defendant owed these debts,” Srinivasan said.
As Brafman noted, since Shkreli"s departure, Retrophin has become enormously profitable - it"s now worth about $700 million, and, Brafman said, the board is still "raping" the company. Brafman also argued that the board"s treatment of Shkreli was unceasingly cruel, saying they mocked him and questioned his sexuality - all for being "different."
Investors may have made their money back, but Shkreli still committed fraud, the prosecution countered.
The trial is expected to last between four to six weeks.
