By Yoshiyuki Osada and Marika Tsuji
TOKYO (Reuters) - On Japan's 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 friends made a total profit of about 50 million yen ($444,000) in bitcoins, the currency of the exchange.
He bought back an unspecified number of Valus in an effort to make amends, he said on Twitter, which VAZ and the exchange confirmed. But his Valus never recovered their highs.
His shares, which hit a peak of 0.090 bitcoin, or around $387, before he sold out, tanked to as low as 0.0075 bitcoin. They last stood at 0.014 bitcoin on Friday, or about $50 at the current bitcoin rate.
The exchange declined to comment on how much his supporters lost.
The incident was a rude awakening for Valu, which was launched this summer and has so far attracted about 60,000 members. Fund raisers sell Valus to the members, who are free to buy and sell their stakes.
Valu's operator, a subsidiary of a company called Party Co, makes clear in its rules that listings have no intrinsic value.
There are also no requirements for reporting results, or any other information. There are no voting rights, or dividends.
That means the sole basis for rising shares is speculation.
"What Valus represent is a big question," said Makoto Sakuma, a researcher at NLI Research Institute. "Despite their name, Valus have little economic fundamental value."
Party Co says buying Valus should be seen as a donation or show of support rather than an investment.
"Our service can directly support people in any places across the globe," said Kohei Ogawa, president of Valu Inc.
Kenta Toshima, 30, listed himself on the exchange to raise funds for equipment for a project to help rehabilitate elderly people with virtual reality.
He said he had raised about 200,000 yen from about 40 people within a few weeks after listing himself.
The exchange's operators say they will keep going. But the backlash against Hikaru appears to have taken its toll on the YouTuber.
In early September, Hikaru posted a video in which he appeared with Ikkun and Raphael, and said he would halt his YouTubing activities.
($1 = 112.64 yen)
(Additional reporting and writing by Hideyuki Sano)