Equiti Games, a Katonah blockchain technology company, distinguished itself last year amongst its peers when it won a global startup competition. But it has yet to see the $2 million grand prize.
Equiti claims the contest was a sham, and it has sued the sponsor, F50 and managing partner David Cao, for $2 million in Westchester Supreme Court.
Cao and F50 market themselves as “angel investors and saviors of venture capital,” the complaint states, but “their fraudulent practices are anything but angelic.”
F50 did not respond to an email asking for its side of the story.
Equiti Games co-founders Tony Caputo and Nicole Allen set up the company in 2017 to apply blockchain technology to the licensing of digital games. Typically, when a game is downloaded the user is leasing the game, according to Caputo, not buying it.
Equiti’s technology creates a digital asset that developers, publishers and gamers can trade on a secondary market. A user who has grown tired of a game, for example, can sell it.
F50, based in Palo Alto, California, promotes its events as summits for connecting investors and startups.
Last year it invited Equiti Games to participate in the Founder World 2018: Blockchain Impact conference in San Francisco, according to the complaint. F50 purportedly claimed that 1,000 blockchain startups from around the world would compete for a $2 million grand prize.
Equiti paid the $6,500 entrance fee, made it to the final round of 20 startups from the U.S. Canada and China, and was declared the champion.
Equiti “wowed the judges,” according to a news account of the competition. Contest judge Sergey Paramonov said Caputo’s presentation was impressive, “leaving the judges with no choice but to award them the prize money.”
Caputo was presented with a $1 million ceremonial check. The complaint does not explain why the check was written for less than $2 million.
Cao featured Caputo in online interviews and discussions and got Equiti to participate in a trip to China. But F50, according to the complaint, was actually using Equiti success to promote its own legitimacy.
F50 made “numerous false assurances” on its intent to award the grand prize but ultimately, Equiti claims, Cao admitted that F50 never had the funds or ability to pay the prize.
F50 continues to commit a “contest and conference charade,” the complaint states, by promoting a new version: Founder World 2019: Impact One Billion Lives.”
Equiti accuses F50 and Cao of breach of contract, breach of covenant, fraud, unjust enrichment and deceptive business practices.
It is represented by James T. Hunt Jr., Tenaglia & Hunt of Rochelle Park, New Jersey.