EthereumCapital Fraudulent Project?
For my first expose on the current batch of dodginess appearing in the Crypto space, alongside the emerging bull period (2020–2022), I have found that Ethereum Capital is the first candidate.
The following will expose the red-flags in this project.
[1] Ethereum Capital Wallet (ethereumcapitalwallet.com) is utilising the branding of a respectable capital organisation by the same namesake Ethereum Capital [https://www.crunchbase.com/organization/ethereum-capital] which it does not have any affiliation with, this is to add credibility to the project when people commence their due diligence
[1a] Real Ethereum Capital.
[1b] Faux Ethereum Capital.
[1b1] Cache https://web.archive.org/web/20200801065805/https://ethereumcapitalwallet.com/
[1c] Utilising brand awareness to strengthen the image.
[2] Promising returns utilising state of the art technologies.
Throughout the Ethereumcapitalwallet website, there is a large degree of hyperbole used to create FOMO or fear of missing out and cleverly worded descriptions which are out right fraudulent misrepresentation and maybe even potential securities violations. Below is just a brief run down of my thoughts on the project.
[2a] Within the opening of the site, Ethereum Capital promises ‘life-long passive income’, with the average lifespan of 60–80 years worldwide, this company is promising returns for approximately 60+ years based on your investment in their project.
See SEC Bulletin: https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings
To obtain returns, one needs to invest, so as to achieve the passive income for the remainder of their life, this surely would then be an investment of money [Prong 1 — Howey, Prong 2 — Howey is achieved with There is an expectation of profits from the investment through the passive income for the remainder of your life].
[2b] Protected by the blockchain.
This provides a false sense of security, for a number of reasons, currently, we are operating over ETH 1.0, with an upcoming hard fork to ETH 2.0 (which could send ETH to $2,200–$5,000).
[2b] This will also break most smart contracts, which requires a ‘physical’ team to re-compile for the new variation of the blockchain. They are reliant on a 3rd party to both ensure its continued operation but also recompile for various changes through the life cycle of Ethereum blockchain for the proceeding years. With that in mind, this implies that Prong 4 — Howey has been achieved as the investment of money is in a common enterprise.
Aside from this, the following statements are entirely misleading, smart contracts are not immune to being breached, and as the code around them which interacts with them, is enhanced, continuous opportunities to breach smart contracts appear due to weaknesses appearing.
Breaching false advertising based on the inability to ensure such a claim, that the funds are protected by the blockchain, and that they are secure from theft.
You can read up about the countless vulnerabilities in smart-contracts here: https://forum.openzeppelin.com/t/list-of-ethereum-smart-contracts-post-mortems/1191
[2c] Ethereum Capital Explained.
[2c1] In the first section “Earning Dividends”, Ethereum Capital appears to stand out from other passive incomes, by stating that they are different, this is done in a fashion, where they weaken the position of the 1% day projects and push themselves forward with a much larger % of 20%.
Again they claim the smart contract is immutable, which as shown in [2b] to be a laughable claim and again in [2b] the requirement for a team, person or enterprise to continuously keep abreast with the changes with web-programming, as well as Ethereum blockchain changes over the remainder of your living life.
[2c2] The overuse of “FOMO” by mentioning that Ethereum is expected to grow quicker than BTC (900%) and that by entering the contract you will surely get rich.
[2c3] False sense of security claim, again revert back to [2b].
[2c4] Showing the growth of the Ethereum Blockchain from 2018 to entice people (greed index) into their project, with similar promises of returns see [2a].
[2d] Malicious False Information.
The highlighted text: AI Intelligence and can never be stopped by anyone, including any government or even its creator.
This statement is entirely false. How can anyone not consider this as fraudulent misrepresentation and potentially leading into communication fraud/wire fraud for the following reasons?
fraudulent misrepresentation, when the following occurs : the plaintiff must be able to prove the following six elements:
1)A representation was made (in contract law, a representation is any action or conduct that can be turned into a statement of fact).
2)The representation was false.
3)The representation, when made, was either known to be false or made recklessly without knowledge of its truth.
4)The representation was made with the intention that the other party rely on it.
5)The other party did, in fact, rely on the representation.
6)The other party suffered damages as a result of relying on the representation.
More about communications fraud (wire fraud) https://www.investopedia.com/terms/w/wirefraud.asp
— Artificial Intelligence, yes can store information on the blockchain (short-term memory, long-term memory, various data types), but it can not operate within the blockchain, the compute resources would require physical servers to operate, physical servers require maintenance, electricity, a fixed abode, without paying for electricity the servers cease to exist, without continuously updating libraries that the Artificial Intelligence requires the code ceases to operate, without having a fixed location, the artificial intelligence does not exist.
Also note the use of AI Intelligence, any organisation involved in AI would just use the term AI, not AI Intelligence which translates to Artificial Intelligence Intelligence, nonsensical gibberish.
Finally, there is no reason for a smart contract of this sort (which requires buyers and sellers to buy the token to push the price up to and sell the token to push the price down, to utilise Artificial Intelligence in any manner.
[2e] Red Flag — EthereumCapital Copyright.
For there to be actual copyright there needs to be a legally registered enterprise, as shown above, the company is leaning on the credibility of a respected investment company that has entered the Crypto Space.
The copyright leads to https://ethereumcapital.tech/ which leads back to the same website https://ethereumcapitalwallet.com/.
[2f] Site ownership/management.
There is no information on Ethereumcapital.tech in the public record, as it is so new.
However, Ethereumcapitalwallet.com was registered on the 23rd of July 2020, for expiry on the same date in 2021, this is a huge red flag, for the project to continuously pay you dividends for life as claimed the site domain would be expected to be live for 5 yr domain purchases.
Note the company also uses Namecheap a US Company, and Cloudflare, a US company which gives the US the authority to intervene against this fraud.
Personal details are hidden utilising WhoisGuard, this violates multiple investment statues, alongside the lack of information about the enterprise, people, accounts etc.
[2g] On the site, ‘Backup Link 2’ is in the header, this leads to the following site: Gold Chip https://goldchip.fund/?address=0x167cb3f2446f829eb327344b66e271d1a7efec9a&start=5417398&end=10572568
There is again no information on GoldChip, this appears to be a branding pre-Ethereum Capital that failed to uptake.
Note the wallet address used for Ethereum Capital, Gold Chip?
This is the contract address used for Ghandiji an iteration of Proof of Weak-hands Ponzi that dumped on its investors numerous times during 2019.
https://etherscan.io/address/0x167cb3f2446f829eb327344b66e271d1a7efec9a
So what we see here, is that the Ponzi Ghandiji has attempted a re-brand to GoldChip fund, then another rebrand into Ethereum Capital.
[3] Ethereum Capital Team.
As there is no public information on the team behind Ethereum Capital nor the entity, which is a violation of multiple financial investment laws, we would have been at a loss, until the link leads back to this Ghandiji project, now with this information, we can provide details on who is behind this project.
Core Team
The important last Prong of the Howey test is “Any profit comes from the efforts of a promoter or third party” this is achieved by determining that Ghandiji.io which re-branded to Gold Chip, which has since rebranded to Ethereum Capital (fake company) is managed, operated by the following individuals.
— Sunny Pendu
— Er Mahavir Garg
These individuals have to honour a continuous payment for the remainder of our lives as promised at the beginning of this article, whilst ensuring domains, sites, 3rd part applications (Cloudflare etc) remain operational, code libraries don’t break (fake ai), and more.
Promoters
The following individuals are promoting fraud, and as such are criminally liable, alongside this, as shown above, the project is not just a fraud but also unregistered security, as such, it is a fraudulent security sale.
According to the following from the SEC’s website adapted to include these projects name, they are liable for the following violations.
Pursuant to violations of Section 17(b) of the Securities Act by publishing, giving publicity to, or circulating notices or communications that describe securities in exchange for compensation received, directly or indirectly, from issuers, underwriters, or dealers, without disclosing its receipt of that compensation or the amount thereof.
These reports, ratings, and social-media postings publiciz offerings of blockchain-based digital assets, namely EthereumCapital that are investment contracts, which are securities pursuant to Section 2(a)(1) of the Securities Act.
— BigK Crypto
British (email: bigkwolfpack@gmail.com)
A known promoter of HYIP (High-Yield Investment Ponzi’s).
— PaceCarMike
American is known
Known associate financial benefactor of Arbitraging.co which was a huge ponzi scam in 2018.
— CryptoCondo
American/Canadian
An unknown/nobody?
— Oracle of Crypto
American
One of the biggest names in Crypto, some state he is a scammer, others state he is a leader, in this project, he appears to be the main instigator of growth.
— Ian Balina
American
One of the biggest names in Crypto, involved in numerous questionable projects such as Sparkster.io which defrauded its investors out of $30,000,000
— Gez Bennet
Unknown/Nobody
— CryptoMuscle
Unknown
Known HYIP/Ponzi Promoter (arbitrating, moonberg, RealBitconnect)
— TheRChannel
Unknown/Nobody
— En J Gold
American
Known affiliated member of Arbitraging, numerous HYIPs/Ponzis since 2018.
Conclusion.
Ethereum Capital is a fraudulent unregistered investment project, which is built as a Ponzi promoted by Ponzi affiliated promoters.
Consider carefully before commencing any investment in the project, there are far healthier projects out there such as Ethereum, AMPL, HEX that will see great returns without giving money to such shady individuals notarised as associated or part of prior frauds.
