A celebrity listing crashes Japanese exchange's party

From Reuters - September 23, 2017

TOKYO (Reuters) - On Japans newest exchange, fame can pay off. That may not be so great for investors though.

Last month, Hikaru, a Japanese YouTube star so famous he can go by a single stage name, listed himself on Valu, a platform for people to raise money, often for personal projects or businesses, by essentially selling shares in themselves.

Unlike many crowdsourcing sites, which are platforms for people or businesses to raise money online from large groups of individuals, the exchange also allows the trading of those who list their Valus on the exchange.

That means that prices can rise and fall. And rise and fall Hikaru did.

Soon after listing, Hikaru, whose YouTube channel boasts 2.6 million subscribers, soared on the market as his fans dived in.

But then, just a week after going public, Hikaru and two friends, who go by the stage names Ikkun and Raphael, cashed out, according to officials from the exchange. That made his Valu drop precipitously, prompting howls of outrage on the Internet.

I was a fan of Hikaru so I bought his Valu partly to support him and this is what happened, said one tweet from someone calling themselves Hikaru Valu Victim. I want my money back.

Hikaru said in a video that he and his friends had been competing to make the most money off the exchange.

Many people listing on the exchange often cite altruistic aims for doing so - like one person raising funds for a project to encourage young people to move to rural Japan. But Hikaru has said that he listed on the exchange just to get attention.

He apologized for the move that may have ended his career, but noted that his actions did not constitute wrongdoing under the rules of the exchange. Those rules just say that members should not post untrue or deceptive information.

There is also nothing illegal about driving up Valus and cashing in, since they are not considered a financial product by the Financial Services Agency.

An official from the watchdog said it had been watching the Valu exchange, but would only advise it to inform investors that listings did not require financial disclosure.

Since the Hikaru debacle, Valu has added restrictions on the frequency of trading to prevent similar occurrences.

Hikaru and his two fellow YouTubers did not respond to requests for comment.

VAZ Inc, a company that represents Japanese YouTubers, including Hikaru and his two friends, said the star and friendsmade a total profit of about 50 million yen ($444,000) in bitcoins, the currency of the exchange.


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