Here's how crazy the cryptocurrency market is

Last Updated Jan 10, 2018 11:57 AM EST

At first, Fantasy Market seemed like a dream come true for cryptocurrency investors. Now, the digital money that consumers could use to pay to stream pornography has turned into a nightmare.

According to the New York Post, Fantasy Market CEO Jonathan Lucas has "disappeared" with the investors' money and ignored their repeated requests for refunds. Lucas planned to raise as much as $25 million through an "initial coin offering" (ICO) that had been planned for December but was scrapped after the Post raised questions about the deal, the paper said.

Fantasy Market's website has been shuttered and currently contains a message directing investors seeking refunds to contact the company via email by an April 1 deadline. A company spokesman denied the Post's allegations and said Lucas is "working to finish issuing the refunds" within the next 72 hours. The spokesperson declined to make Lucas available for an interview, saying he was "busy with the refund process."

"We planned to issue refunds since we canceled the presale and have been doing so for some time," a Fantasy Market spokesperson said in an email. "We canceled [the ICO] because we simply did not raise enough, and it was not economical to continue spending money on marketing."

Fantasy Market had planned to sell what it called Fantasy Market Tokens, nicknamed "porn tokens," using a cryptocurrency called ethereum. According to the news site Altcoinss.com, the company raised $2 million from investors last year offering users the chance to control what performers said and did during their performances.

"If you have ever played a video game where you can control your character's decisions, then you are already familiar with the Fantasy Market experience," Altcoinss quoted a Fantasy Market promotional website as saying.

Investors who gave Fantasy Market bitcoin or ethereum will be given their money back in cryptocurrency and not their equivalent dollar value, according to the company.

 The crypto strangeness doesn't stop there.

Shares of Kodak (KODK) more than doubled to $6.78 on Tuesday after the iconic photography company formed a partnership with Wenn Digital to enter the cryptocurrency and digital licensing markets. Shares of another company called, Long Island Iced Tea Corp. (LTEA) similarly surged when it recently announced plans to change its name to Long Blockchain Corp., referring to the underlying technology used in bitcoin and other cryptocurrencies.

Skeptics such as MIT's Jonathan Parker have long argued that the market for bitcoin and other cryptocurrencies is a bubble that's bound to burst, although the underlying blockchain technology might have a future as does the idea of making money transferrable over distances.

"There are now private currencies that have the potential to decimate bitcoin, those sponsored and supported by banks, like ripple," said Parker, a professor of finance at the Sloan School of Management. "Even these may go under in the face of government competition."

Other cryptocurrency deals are also raising eybrows among investors.

The government of Venezuela, for instance, plans to offer a token backed by sales of oil, with a coin it has dubbed the petro. President Nicholas Maduro has said the petro is designed to help the cash-strapped country evade sanctions levied on it by the international community.

On a more positive note, JPMorgan (JPM) Chief Executive Jamie Dimon told Fox Business News he regretted calling bitcoin a "fraud" and threatening to fire employees who traded the digital money. Though Dimon described bitcoin's underlying blockchain technology as "real," he told the business channel he was "not interested that much in the subject at all."

"Jamie Dimon's about-face is not surprising since Goldman Sachs (GS) has entered the business of clearing bitcoin futures trades for its clients," said Trevor Gerszt, CEO of CoinIRA, which specializes in digital money, in a statement. "Dimon just has to try to disassociate himself from his previous comments so that he doesn't lose face when JPMorgan inevitably expands its bitcoin operations."

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.