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Case Study – Cryptocurrency Sponsorship Due-diligence

Posted on 23 November 2020

Our client was a sports management company who promotes, broadcasts and sponsors live events. ​

They were approached by a cryptocurrency “initial coin offering” (ICO) who wanted to sponsor their events, offering a significant commercial deal. ​

Our client wanted to know more about the reputation of the company, its directors and any financial, legal or reputational risks a commercial agreement may pose.

As well as providing personal due diligence on the individuals behind the company and their non-executives, MDR Cyber reviewed the business behind the company, reviewing their corporate structures, white-paper literature and testing claims they had made about their business model and proprietary technology.

The prospective sponsor was found to pose significant and high financial and reputational risks to our client. There were opaque beneficial ownership and corporate structures, a fraud warning from a European government, associations with criminal enterprises and technology which lacked evidence of functionality and credibility.

The client was able to make an informed decision about doing business. Subsequent to our investigation, police seized millions of dollars from the ICO operators and issued cease and desist warnings.

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