Space project fundraising controversy escalates: investment firms pressure for timely refunds and transparency of funds

The fundraising controversy surrounding the Space project continues to escalate. On January 23, investment firm Morningstar Ventures publicly issued a statement, demanding that the project team launch a refund claim page by January 27 as previously promised, and refund at least 50% of the raised funds. This is another pressure point from the community and investors following Space’s announcement yesterday to refund $7.3 million, highlighting concerns over transparency and execution.

The “Soft” and “Hard” Dispute over Fundraising Disclosure

The controversy sparked by Space in its latest ICO primarily stems from vague descriptions of fundraising information. According to previous reports, the project initially disclosed a fundraising target of $2.5 million, but the actual amount raised reached $20 million, an eightfold difference.

The project team explained that the $2.5 million was a “soft cap” rather than a “hard cap,” aligning with industry practices on Launchpad. They claimed this amount could only support initial development for a few months and was insufficient for multi-year infrastructure projects based on leverage market predictions. However, this explanation has not quelled skepticism.

Why is this time different?

From Ethos CEO Serpin Taxt’s criticism, the issue isn’t whether oversubscription is allowed, but the overall approach of “nominal fundraising of $2.5 million, actual fundraising of $20 million, and retaining $14 million.” This practice has been directly accused of malicious manipulation and is compared to the previously controversial Trove project. The core concern of the community is: when the fundraising target and actual scale differ so greatly, how can investors assess the project’s true financing needs?

What Does Morningstar’s Statement Mean?

Although Morningstar Ventures emphasizes that they are small investors and not lead investors, their public statement carries symbolic significance. It indicates that:

• Investors’ trust in the project has begun to fracture
• The community’s call for refunds is strong enough that investment institutions must respond
• The project’s execution and transparency have become key evaluation criteria

Morningstar’s specific demands include three points:

1. Launch the refund claim page by January 27 as promised
2. Refund at least 50% of the raised funds, allowing all public sale users to opt for partial refunds
3. Disclose fund usage, current balance, and future roadmap

These demands seem reasonable but also pose a challenge to the project team—meaning they need to come up with concrete plans within a short timeframe.

Can the refund commitment be fulfilled on time?

Space decided yesterday to refund $7.3 million of excess funds, which is a positive signal. However, based on Morningstar’s wording, they still have doubts about the project’s execution ability, which is why they emphasize “as previously publicly promised” and “January 27” as two critical elements.

A detail worth noting: Morningstar mentioned “at least 50%,” implying that even a 50% refund would be acceptable. This phrasing provides a buffer for the project team while also setting a bottom line.

Valuation of the Project Itself

Space is a decentralized leverage prediction market project within the DePIN track. According to related information, the project involves former SpaceX engineers, giving it some technical credibility. Binance Alpha also launched the Spacecoin (SPACE) token on January 23, indicating market interest remains high.

However, the fundraising controversy could have long-term impacts on the project. Even with promising technology prospects, if trust is damaged, subsequent fundraising, user growth, and ecosystem development will face challenges.

Key Points to Watch

This incident reveals that the structural issues in the current ICO stage are indeed worth noting:

• The definition and presentation of fundraising targets need to be clearer and more standardized
• Information asymmetry between investors and the community remains insufficient
• Project teams’ transparency commitments are often diluted by market hype

The future performance of Space—whether it can launch the refund page on schedule, truly disclose fund usage, and when the first public version of the product will be released—will directly influence the project’s credibility recovery.

Summary

Morningstar Ventures’ statement essentially serves as a final ultimatum from the community and investors to the Space project. If the project can deliver as promised by January 27 and gradually disclose fund usage, trust may be gradually restored; but if it defaults again, this fundraising controversy could become an indelible stain on the project. For other projects in the fundraising process, Space’s case serves as a warning: the accuracy of fundraising information and the credibility of execution are more important than the fundraising scale itself.