What a week we just lived. Scams intensify since everyone invests in everything like there’s no tomorrow. Welcome to the realm of extreme greed and low self-esteem. Welcome to the world of cryptos.

Dumpcry’s Diary is your new weekly dose of grumpiness.

Scams everywhere

Since Bitconnect is dead last week, we are having some fun with Carlos Matos Tweet feed, and many projects want to be the next Bitconnect. They don’t care if it is legal or not, bad or good, funny or gay, they just want the dumb’s money and god knows how much there is. Among the fascinating projects that appeared on my radar was AdverX, which guaranty a ROI of 40% per month if you use their lending platform. And of course, they also have an affiliate program because scammers like pyramids. Actually, there are so many scams ongoing that I can’t list them all. Most of them will raise between 0 and a few ETH, but a few of them can be quite successful. Arbidex, a shady project directed by an unknown team of unknown people, is claiming with suspicious charts and screenshots that they will allow you to make arbitrage on main exchanges with no endorsement whatsoever or any working product (they actually advertise some sort of fake MVP). Why I’m talking about them is that they already raised 7 freaking millions $. You wonder why? To me, it mainly is because they have the CEO of Matrix in their advisors. Of course, I sent a message to him and got no answer. But whatever the answer would be, I wouldn’t classify either Matrix in the “super legit” category. Remember that their whole token supply has been sold in 5 minutes to only 200 people.

The ICO game has changed since last year. The crowdsale is now occurring at the pre-sale stage and often even being whitelisted for the pre-sale can’t guarantee that you’ll be able to invest. The craze is so intense that many projects don’t even bother making a decent website or whitepaper. Who even cares about the appearance of feasibility, the money is going to flow anyway, it is all about the team, the hype and nice word stuffing. So, no wonder that you will find known or well-known people in the team of highly suspicious projects. There are so many ICOs, they are happening so quickly and the important people are so hard to reach that fake ICOs will be funded way before everyone realizes that everything was fake from the team to the partners. Fake partners display is even a common practice now: Someone in the team has studied at Oxford University? Put Oxford in the partners’ section! You don’t want to be caught blatantly lying? Call that section “Partners / Media / Training” and put whatever you can think of: schools, outlets, Google, Microsoft, everything, who cares.

The smartest scams are always those who know how to make it so complex that it looks like the next big thing made by geniuses. Some projects are very funny, like 0Chain and its promising self-forking multi-dimensional infinitely scalable non-conventional blockchain but with a 180 days vesting for everyone lol, or Seele, the blockchain 4.0 with a whitepaper that would win the 1st prize at the International Futuristic Word Stuffing Awards: “Seele is powered by an up-scalable Neural Consensus protocol for high throughput concurrency among large scale heterogeneous nodes and is able to form a unique heterogeneous forest multi-chain ecosystem”. Yeah ok, I prefer to invest in the coin baked by bananas, at least, this is real.

Real scams are real

Until now I was only talking about soft scams, i.e. projects that will exist anyway. They are going to issue tokens, and maybe even release a product at some point. Some of the hyped soft scams may actually be good flipping opportunities. But playing with scams may cost you if they are real ones. That is what happened to those who invested into Benebit ICO. The project was hyped to the max, it was of course listed on many well-known listing websites like ICOdrops and ICOBench (I told you months ago that listing websites add scams, they don’t care about you), and various pools were collecting ETH in order to participate in the pre-sale. Once they reached a few thousands of ETH, the team deleted everything and evaporated. If you have enough popcorn, you can have fun tracking the money. It started here, then it went here and was cut in small pieces here.

Another exit scam was made by Prodeum. The drill is similar: they created a promising website with a fake team and erased everything before disappearing with the money. The little twist here is the fun marketing campaign where they used Fiverr people to write the name of the ICO on their body, and also the fact that they most probably gave many different addresses to the participants, which makes it very hard to know how much has been stolen. At the end, they left a kinky farewell note.


So this week was also taking place the ICO of APEX, a quite trendy project with a small cap (6 M$ USD), a quite low individual cap (4, 10 and 30 NEO max, which is 600, 1500 and 4500 $ max) and a duration of 3 hours (3 rounds of 1 hour each), which is maybe not enough to call it “super fair” but at least better than the 17 secs of Devery.

I loved that event because it showed exactly why short-duration ICOs suck and why spreading one ICO along multiple days should be common practice. The community got quickly confused as multiple addresses were shared. It appears that a hacker replaced the funding address that was on the website. The website was taken down and the official address provided on Twitter. But there were a lot of suspicions about if the source was still truthful.

Note the reassuring words from Apex, for sure looking like totally legit and professional social management work. Quickly after, Apex shared on Twitter a photo of its CEO holding a piece of paper. On this piece of paper, it looks like a child was asked to write the ICO contract address.

Seriously who in the world launches a business this way? I really wonder what was the mindset of those who sent their NEO anyway. “I can’t wait for the final product :)”, “They need to be rewarded for their skills, here, my NEO” ??? The combination “website hacked” + “CEO holding a piece of paper in a white room” should be an instant no-go for any sane dude. Anyway, the ones who sent their money to the wrong address will receive the corresponding amount of CPX tokens, which is a great way to deal with the loss, but the price at the tokens release will most likely be negatively affected by this.

Hacking Week

Yes, it was not only another intense week of scams, it was also a very lucrative week for hackers. The hottest event was the hack of Coincheck, a Japanese exchange started in 2012. The hackers stole 500 Millions $ worth of NEM tokens, which is the biggest hack ever happened in cryptocurrencies.

Surprisingly, markets didn’t move that much. Most of crypto-assets went slightly down but it is unsure how much this was affected by the hack. However, I’m confident that the price of NEM tokens will not go back above 1.5 $ for a very long time.

Another hack, but less impressive: Experty.io. It appears that someone gained access to the mailing-list of Experty and used it to send emails with the wrong wallet address. A good amount of people fell for it probably until this urgent blog post. He finally cashed out 123 ETH on 3 different addresses Sunday night. Clearly, someone is going to enjoy his night closing at +125 000 $USD EZ mode. So be cautious and always double-check when you are about to send money to an ICO, apparently some tomorrow’s Blockchain 4.0 builders aren’t able to secure their own centralized infrastructure.

And yes, all of what you just read happened only the last week.

King of Greed

A last one before I go. Gems, a Mechanical Turk project backed by important people from Twitter, Facebook, Aragon, Augur and District0x, was clearly the most hyped project of this early 2018. Mid December, they decided to use that hype by creating the Gems Community Program. The idea was simple: the more you Shill the project (by inviting people, writing blog posts, making Youtube videos, …) the higher are your chances to get included in the whitelist. This way, they quickly raised an army of little slaves. Some dude tattooed the Gems logo on his arm and, with 50k people shilling the project 24/7, their Telegram group soon looked more like the Poloniex Trollbox (RIP) than any regular chat.

Good boy.

BUT, on January 23 (so, last week) they announced their token sale and unveiled its rules. We learned that the sale would be a max 20 hours long dutch auction and that they only distributed 25% of the tokens (2 M).

Shortly after the announcement, the whole community was quite angry and what appeared to be the hottest ICO of January ended up being just another scam. But the Gems team heard its community (and bank accounts) and rather than conducting a disastrous ICO, they chose to cancel it as we can read since January 28 on their Telegram:

“As you may have guessed, the token sale planned for 1/30 will not occur. We don’t want to rush into announcing anything, but please rest assured that more information will be announced in due time. Thank you all for your continued support!”

I can’t wait for the outcomes of this, see you next Sunday!


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