Buyer Beware: Crypteks’ USB Kickstarter Campaign Highlights the Perils of Crowd Funding

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Crypteks

5 Comments to Buyer Beware: Crypteks’ USB Kickstarter Campaign Highlights the Perils of Crowd Funding

  1. The product of crypteks should be delivered to the baker in 2011 – which have not happened. There was no explanation from the producers, whether and where there are problems. And then silence – some blabla – and silence again. In early 2013 the producers suddenly announced that there is a new management, everything is back on track – what ever this should mean. No explanation. Then they offered a refund for the people who do not want to wait any longer. And it seems that none of these really get their money back. Since this the radio is silent again. And at the same time the guys which have taken $ 200,000 without providing anything in return offers a new product under a new company name.I guess you can say absolutly that this is “taking the money and running”.

    • I agree they could do a better job communicating. To me, though, “taking the money and running” means the project creators used the funds for something other than trying to fulfill the rewards or complete the project. The only way we can tell that is to audit their books. The only way that can be done is for someone to sue them.

      It’s been done before, the Kickstarter project Hanfree ipad holder was sued by one of the backers when it failed to deliver. The project creator declared personal bankruptcy. The records showed that he put the Kickstarter funds in his personal checking account. That’s not to say he didn’t try to fulfill the rewards, but it cost a lot more than he thought it would and some of the money was used for personal expenses.

      I think the lesson here for anyone creating a Kickstarter project is expect cost overruns. Don’t post a project if you actually need the money to live on.

      • Dear Mr. Nowotarski,
        If i understand you correctly you say “taking the money and running means the project creators used the funds for something other than trying to fulfill the rewards or complete the project” .

        So what is this after your definition:

        Product: Crypteks USB
        Company: Crypteks/Cryptrade
        Funding period: Nov 23, 2011 – Dec 23, 2011
        Team:
        F.K., Fahad Koumaiha aka “honey-voiced Crypteks boss Fahad Komaya”
        RALPH (Randy) R SAFFORD from Safford & Baker, PLLC in Bloomfield Hills, MI.
        Fadi Badawi

        Crypteks/Cryptrade + $196,404
        Twitter and Facebook is dead since end of 2011

        Bakers – $196,404
        no product, no refund, no information

        Product: “FrostBit.”
        Company: Cryoniks, Inc
        Release: May 2013
        Team:
        F.K., Fahad Koumaiha aka “honey-voiced Crypteks boss Fahad Komaya”
        RALPH (Randy) R SAFFORD from Safford & Baker, PLLC in Bloomfield Hills, MI.
        Webhosting by Fadi Badawi, CEO from Bitwize and Crypteks/Cryptrade

  2. You say that “There have been several high-profile cases of creators of successful Kickstarter campaigns “taking the money and running”.

    Can you say which ones? To the best of my knowledge, no Kickstarter campaign has simply taken the money and run. Some have failed to deliver, but that was only after running into difficulties later on. Many have gone deeply into debt to deliver. Again, to the best of my knowledge, they all tried and did their best, even if they failed.

    • So, this could probably be the first one. No one has really seen the actual product pics, even a proto-type’s to this day and the same people that did this Crypteks are now doing it all over again w/ the bigger Cryoniks project that would cost $15k at least. (BTW, they have stopped accessing Kickstarter’s Crypteks/Cryptrade page since May 2nd, 2013).

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