The Jessica VerSteeg Mystery: $12M Cannabis ICO That Disappeared With Its Founders

When Jessica VerSteeg and her Russian entrepreneur husband Egor Lavrov vanished, they left behind more than a failed startup—they left investors with $12 million in losses and courts scrambling to locate the defendants in what’s become one of the ICO era’s most perplexing legal sagas. The case of Paragon Coin has evolved into a cautionary tale about accountability in crypto, where the industry’s most ambitious projects can crumble, leaving only unanswered questions in their wake.

The Northern District of California certified token holders as a class in the landmark case Davy v. Paragon Coin, Inc., clearing the path for what could become a sweeping default judgment against the missing founders. “Once we have the class certified we will then seek default judgment on behalf of the entire class for all of their damages,” said attorney Donald Enright, representing the plaintiffs. “For the full value of the Paragon ICO.”

From Beauty Queen to Crypto Entrepreneur: Jessica VerSteeg’s Rise

Jessica VerSteeg arrived in crypto with an unusual pedigree. The former beauty queen from Iowa had transitioned into reality television before discovering blockchain in the summer of 2017. Alongside her husband Lavrov, she became the face of Paragon—a project that promised to merge cannabis commerce with cryptocurrency innovation. The duo presented themselves as visionaries ready to “revolutionize” an entire industry.

According to Forbes coverage from 2018, Paragon offered a complete ecosystem: ParagonCoin (PRG) as the native token, ParagonChain as a blockchain solution designed to streamline marijuana supply chains, and Paragon Space—a cannabis co-working venue planned for Los Angeles. It was an ambitious pitch, and VerSteeg became its primary spokesperson, handling media outreach and investor relations.

The Celebrity Connection: The Game Joins the Campaign

The project’s marketing strategy relied heavily on celebrity endorsement. Hip-hop artist Jayceon Terrell Taylor, known as The Game, emerged as a vocal supporter, promoting the ICO across his social media platforms. The partnership aimed to bridge the gap between crypto’s tech-savvy base and mainstream audiences interested in cannabis legitimization.

However, this high-profile collaboration would later become a liability. The Game was eventually named as a defendant in the securities lawsuit, alongside VerSteeg, Lavrov, and several technologists including Eugene Bogorad, Alex Emelichev, Gareth Rhodes, and Vadym Kurylovich. Most defendants proved unreachable for comment.

Inside the Hacker House: How Paragon Was Actually Built

According to Eugene Bogorad, former chief strategy officer, the operation was far more informal than the polished branding suggested. In 2017, Lavrov invited approximately five people, plus VerSteeg, to a makeshift hacker house in California. The team wasn’t a formal company, but a temporary collective paid in cryptocurrency and fiat with promises of future token allocations.

“I wasn’t connected to the Facebook and Google advertising, which was the biggest cost-driver,” Bogorad explained. His role was limited to marketing coordination from July to August 2017. VerSteeg handled media outreach and promotion with The Game, while others managed customer support and development work. Bogorad stressed that this temporary arrangement wasn’t intended as a permanent organizational structure.

The operation raised approximately $12 million in digital assets during the 2017 token sale, according to SEC filings. This figure would become central to ongoing litigation as investors sought recovery.

The SEC Intervention and Subsequent Penalties

In 2018, the SEC took action. The regulatory agency determined that the Paragon token sale constituted an illegal securities offering, triggering fines and compliance requirements. By early 2019, the SEC had levied financial penalties against the entrepreneurs. However, enforcement proved complicated—by November 2019, the Wall Street Journal reported that the Paragon team missed several payment deadlines associated with these fines.

Despite regulatory pressure, VerSteeg and Lavrov maintained a public presence through 2018, though former colleagues noted they became increasingly unresponsive. Their social media activity dwindled throughout 2019, with the last documented posts appearing in July from Kiev, Ukraine. After that point, the trail went cold.

The Disappearance: Tracing the Missing Founders

By 2020, Jessica VerSteeg and Egor Lavrov had completely vanished from public view. When asked about their whereabouts, Bogorad offered the most recent account: “I think they’re together and disappeared together. Last we heard from them they were visiting the development team near Kiev.” Etherscan data showed that wallets associated with the project ceased activity in August 2019, weeks before the couple effectively disappeared.

Howard Schiffman, the former defense counsel, declined to elaborate beyond stating that his law firm hadn’t worked with or heard from the accused “in years.” The defendants’ attorneys have since withdrawn from the case, and the defendants failed to appear in court or respond to allegations—a legal default that strengthens the plaintiffs’ position.

One anonymous early contributor to the project expressed no desire to locate them. “Paragon became toxic. I’ve avoided any relations for more than one year,” the participant said. Another contributor, who worked on the project briefly in 2017 under similar terms as Bogorad, characterized the venture as dysfunctional and viewed the ongoing litigation as lawyers “trying to spam courts.”

Class Action Status and the Path to Default Judgment

The certification of token holders as a class represents a turning point in the case. With class status granted, attorney Enright can pursue a default judgment against the entire group of defendants on behalf of all affected investors. The courts face a significant challenge: how to enforce judgment against founders who have effectively disappeared.

The case against Paragon stands as one of many ICO-era legal hangovers. The 2017 token sale boom generated thousands of projects, but Paragon became emblematic of a broader pattern—ambitious promises, regulatory violations, and founders who proved unreachable when accountability came due.

The Broader ICO Reckoning

Paragon’s collapse underscores why regulators remain skeptical of token-based fundraising. While some projects evolved into legitimate enterprises, others like Paragon exemplified the lack of accountability that characterized the ICO craze. The case also demonstrates how international jurisdictions complicate enforcement—with key participants distributed across California, Moscow, and Eastern Europe, pursuit becomes exponentially more difficult.

Jessica VerSteeg’s transition from beauty queen to crypto entrepreneur ended not with innovation or redemption, but with flight. As courts continue searching for her and Lavrov, their absence speaks volumes about the consequences of regulatory violation and the inherent risks when projects prioritize hype over substance. The $12 million in investor losses tied to Paragon remains largely unrecovered, a painful reminder of the ICO era’s darkest chapter.