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When fundraising in 2019, the founder of crypto venture VirtualStax told potential investors his company would bring in $97 billion revenue in three years. But its tokens and its celebrity endorsers’ digital trading cards have yet to launch.

A Ponzi scheme according to Investopedia is “a fraudulent investing scam which generates returns for earlier investors with money taken from later investors.  Ponzi Scheme organizers often promise to invest your money and generate high returns with little or no risk”.  Below is a screenshot from turncoin`s website, the sister company of virtualstax claiming that there is an 820% yield on a token that is not trading on any secondary exchange with no live product at the time of publishing this information on their website.  This has been removed from their website after Forbes published an article on the company`s discrepancies as this is clear misrepresentation.   

Tim Mak, an early investor in Turncoin/Virtualstax based in Dubai made an investment with the promise from Rudolf that he will receive his money back shortly with upside compensation in August 2019.  He was paid back from the next investor`s funds a few months later.  How else, as there was no product in 2019.  Similarly, Andre Louw and Richard Boyd then also funded a few million South African rands (around 150k USD), knowing they will receive it back from the next investors with decent upside in a short period of time as per Rudolf`s promise (The CFO during 2020 Werner Coetzee confirmed that both have been paid back also in a similar fashion).  You as the reader can draw your own conclusion on the ethics of these transactions as the company have been raising funds since 2017 with no product on Appstore or Google play to date.  Repaying old investors was definitely not transparently disclosed to new investors.  How many others are there?

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.  One would like to question how fair and ethical this capital raise is to the public as they claim it is valued at 14.92 usd based on future revenue or suggesting that it is trading at 14.92 USD a token as per their website screenshot but selling at only 2.98 USD a token on according to a formal private placement memorandum to create urgency and FOMO amongst new investors.  However private messages have been shared where Rudolf Markgraaff offers these tokens or so-called securities to friends at 0.50 USD a token.  Is there even any other current revenue than the selling of tokens being printed freely? Why haven`t the SEC stepped in against this type of misconduct?

The 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 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.)

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.”

In a statement, a spokesperson for James said “LeBron has never endorsed, invested, or had any relationship with these companies.” Representatives for VirtualStax ambassadors Mahomes, Jackson and Carter did not respond to requests for comment.

The claims against the South Africa-based company — which says it has offices in six cities across the world, including Austin, Texas — come as the Securities and Exchange Commission ramps up its crackdown on celebrities endorsing crypto projects that promote opaque investment opportunities without disclosing they are being paid. Kim Kardashian, for example, was fined $1.3 million in October for promoting the cryptocurrency EMAX on her Instagram without disclosing her financial relationship with the company.

Markgraaff, apparently unfazed by increasing regulatory scrutiny of operations like his, continues to evangelize VirtualStax with near-hagiographic pronouncements. A smooth-talking South African with a proclivity for grand statements, his LinkedIn paints the image of a serial founder with a dynamic background: a social media website for golf, a venture to build 10 all-in-one film sets and “7-star resorts” in Namibia, and a film production company.

But the golf site,, doesn’t exist, and archived versions of the site show it was inactive during the period Markgraaff claims to have run it. After a flashy launch event in 2010, the resort-film set venture, Desert Star Holdings, never took off, according to The Namibian newspaper, which reported that the company raised $20,000 for an AIDS-support charity, but only distributed around $1,000 (Markgraaff told the publication: “Don’t ever even bother to send us new questions as long as your bullshit idiotic old articles remains online”). And Charis Productions, the film company Markgraaff claims to have founded in 1992, doesn’t appear to have produced a film, though fundraising documents show it once sought investors to fund a Christian film called “The Lamb,” telling them it would generate $75 million at the box office.

“Namibia: Desert Star Has Become Difficult to Trace”

“On top of being unreachable, the company gave only N$100 000 to a charity organisation, from N$1,5 million collected at a dinner they held during a launch in 2010.”

Three investors and former employees who worked alongside Markgraaff described him as a gifted salesman. In screenshots of a private Telegram group for TurnCoin insiders, reviewed by Forbes, Markgraaff asked members to “pray over” the names of five potential investors who “could comfortably fund $1m each,” during the company’s push for seed funding in 2019. Members often responded to these requests with inspirational bible quotes or simply: “Praying!”  Including Stoval Weems accused of fraud invested over $100,000 in turncoin.

Kelley was among those sold. A former Motocross star turned weight loss guru with billboards spattered across Houston, he was introduced to another pastor, Al Velez, of Eagle Mountain International Church in Fort Worth, Texas, in 2019, who’d been trying to raise money for TurnCoin as its “director of philanthropy.” In addition to the alleged one million TurnCoin offer, Kelley claimed in his lawsuit that Velez said he would be given a 20 percent commission for any other investors he brought on. Velez did not respond to a request for comment.

By the end of 2021, the company had built an impressive group of celebrities to boost VirtualStax — before the digital trading cards even existed. Randy Jackson told the camera in one promo, “Guess what, VirtualStax, TurnCoin, we’re ready for you baby.” Others like country musician Luke Bryan and New Orleans Saints NFL player Cameron Jordan have since signed on, adding to a roster that also includes NFL stars Von Miller and Drew Brees. Representatives for Bryan, Brees, Jordan and Miller also didn’t respond.

Though TurnCoin and VirtualStax have posted a conga line of promotional YouTube videos — bombastic monologues from Markgraaff, two dozen TurnCoin employees singing a song — they have said very little about investor returns. On its website, the company states that TurnCoin holders can anticipate their first monthly payment in early 2022, “after the global launch of VirtualStax.” But the launch has come and gone, and all one billion TurnCoin continue to sit in a single Ethereum wallet.

The app has not yet appeared in Android or iOS (though there is a video demo of an iPhone app on and the associated website features VirtualStax cards owned by some college athletes that are available for a few cents. But Stax cards issued by celebrities like Mahomes, who began promoting the company in 2021, are not.

Turncoin`s launch date has been moved around so much it is laughable:


Didn`t Happen!


> on behalf of Rudolf Markgraaff <[email protected]>
Sent: Thursday, July 29, 2021 5:31:16 PM
To: xxx
Subject: DO NOT MISS OUT…Join our Launch: Friday 30 July!

Also, no product launched on Appstore on Google play.


Extravagant party with investor funds and videos on youtube but still no app live on Appstore or Google Play. 

Source: Forbes