On the surface, Japan’s newest stock exchange platform, Valu, may seem like an innovative game changer in that it allows users to sell shares in themselves. The goal of which, for many, is to raise money to start a business or work on personal/freelance projects within their profession. That being said, however, there is at least one kink the company still needs to iron out if they wish to take Valu to the next level – keeping stock buyers from being conned by those just looking to make a quick buck at others’ expense.
Which is exactly what happened this week when a Japanese Youtuber who goes by the name of Hikaru exploited one of Valu’s features to basically cash out on his popularity. While the concept of selling stocks in oneself may seem very similar to basic crowdfunding, Valu also allows the trading of tokens called “VA” between those who list them, and the tokens are also exchangeable with bitcoin. So Hikaru used his popularity to boost the price of his stocks, and then sold them at a huge profit.
Anyone can join Valu and promote their stocks to entice buyers, but while many offer gifts of free services – like exclusive content from an artist, free check ups with a physician, free makeover from a beautician, etc. – Hikaru didn’t even bother with that approach. Instead, he simply let his 2.2 million YouTube subscribers know that he had joined the innovative stock exchange. Then, on August 14, he tweeted that he wanted to do something special and “move his Valu shares in one moment”. The price of his shares skyrocketed, and the following day Hikaru and two of his friends – who go by Ikkun and Raphael – sold their shares for the equivalent of 54,650,000 yen ($490,000) in bitcoin, causing the value of VA tokens to crash.
Fans of Hikaru who had invested in his Valu shares were outraged by the move, with some accusing him of planning the whole thing as a way to cash out. On the other hand, Hikaru and his friends claim that they had no intention of trying to manipulate the market, and that they only wanted to create material for online videos. It just happened to be a very profitable plan.
And since VA tokens are not considered a financial product by Japan’s Financial Services Agency, Hikaru and his friends did not break any laws by manipulating Valu, so they face no legal repercussions. They also stress that they respected the platform’s terms and conditions. However, following the backlash, Hikaru’s management promised to compensate users that had invested in his shares.
The YouTuber doesn’t seem to concerned by the controversy around his actions. He says that he only did it to get attention, and recently announced that he’ll be quitting YouTube. He probably needs to focus on spending all that money.
While Hikaru deals with the internet backlash, Valu has already begun making changes to ensure something like this never occurs again. Stock sales have now been limited to a tenth of the total shares issued to single user per day. Transactions have been capped at 30 per day, and the daily price swings cannot fall more than 50% or rise more than 200%.
Sources: Next Shark, Reuters, Bloomberg
