The public listing of a venture capital company affiliated with tech guru and bestselling author Alex Tapscott and his father Don has suffered a serious blow after CIBC pulled out of the deal amid allegations the VC firm made false and misleading statements to investors, BNN has learned.
On Friday, clients of CIBC received an email obtained by BNN stating: “CIBC has withdrawn as an agent from the NextBlock Global Limited private placement.” CIBC would not comment on the status of the deal.
CIBC and Canaccord Genuity were underwriters on the deal. Cannacord would not comment on their continued involvement, but sources told BNN that the investment bank remained in the deal.
Nextblock CEO Alex Tapscott, who formerly worked at Canaccord Genuity as vice president of institutional equities, did not return emails seeking comment.
NextBlock Global is looking to raise $100 million in a public offering which would see it execute a reverse takeover of Toronto-based Nobelium Tech Corp. Nextblock said it would be investing in crypto-currencies, blockchain hosting platforms and blockchain-based applications.
Trouble for the proposed transaction began on Wednesday when Forbes magazine published an article revealing that a Nextblock investor presentation contained false claims. In one version of the presentation Nextblock boasted it had four high-profile advisors including Kathryn Haun, a former prosecutor who helped lock up cyber criminals; Vinny Lingham, CEO of Civic and shark on South Africa's Shark Tank, Dmitry Buterin, founder of BlockGeeks and Karen Gifford, a special advisor for global regulatory affairs at Ripple.
All four told Forbes that they had never agreed to advise the company.
When one of the advisors confronted Tapscott with the false material in the investor deck, he initially denied it, Forbes senior editor Laura Shin told BNN in an interview.
“[Vinny Lingham] had expressed his question to [Alex Tapscott] ‘hey I’m hearing from people that I’m listed’ and Alex wrote back: ‘obviously you’re not listed. So bizarre,’” Shin said of the exchange between Tapscott and Lingham. “And then Vinny had to say ‘I’m looking at an deck with my face and bio on it.’”
The Nextblock deal had been hot. Underwriters were expecting about $200-million in orders for the deal, a person familiar with the deal told BNN. Reports vary one whether the demand has held up.
Earlier this year Alex Tapscott co-authored the best-selling book "Blockchain Revolution: How The Technology Behind Bitcoin Is Changing Money, Business And The World," with his father Don Tapscott.
The pair are also founders of the Blockchain Research Institute, a Toronto-based think-tank that whose aim is to help “organizations to realize the new promise of the digital economy by researching the strategic implications of blockchain technology.”
CIBC and TD bank joined the institute just last week. Other members include companies such as the Bank of Canada, Deloitte Canada, KPMG LLP, and the TMX Group.
Nextblock is trying to cash in on the boom in blockchain, a totally decentralized digital-ledger technology which threatens to upend the banking industry.
“NextBlock is one of the first entities in the world through which investors will be able to invest in a cross-section of blockchain-based digital assets,” NextBlock said in a press release earlier this year.