About Benebit
A couple of days ago, it became clear that yet another rather well-known and popular ICO project was actually a SCAM.
We are talking about Benebit, whose founders promised to create a cryptocurrency for customer loyalty. Users first started expressing doubts about the founders’ intentions on January 22, when a post titled “Benebit scam” appeared on Bitcointalk. The author stated that project’s team was all fake: pictures of all the team members had been copied from the staff page of an all-boys school in Great Britain, simply changing the names. Here are the pictures from the school site:
And here is the Benebit “team”:
By the time the post was published on January 22, the official site of the project https://benebit.io had been unavailable for over 8 hours. By now, the scam has been confirmed by many news websites and can be considered an undeniable fact.
One of the main questions raised on forums (apart from the issue of what the project’s investors should do and where they can file a complaint) is how a fraudulent project managed to remain undiscovered for so long and even obtain high ratings on many ICO analysis and assessment websites. For instance, the well-known resource ICO Bench awarded the project a rating of 4.1 out of 5, meaning it was “recommended”. The website ICO Drops gave it a neutral rating (now it is in their SCAM section).
To be fair, the project invested (according to some data) over $500 thousand in its marketing campaign, meaning that we were dealing with a well-planned fraud with a complex, properly organized fundraising system. It is easy to imagine that if it weren’t for the sharp eye of some users, who noticed that pictures had been copied, the project would have continued its crowdsale, eventually making away with a much larger amount of money and leaving a much higher number of investors angry and disappointed.
Once the fraud has been uncovered, some websites that had earlier awarded Benebit positive ratings urgently removed all information about the project; meanwhile, the founders, having collected $2.7 million, disappeared without a trace (the official website is unavailable, the Telegram channels is not moderated, and the founders do not reply to posts on BitcoinTalk.
We have to admit that this incident will throw a shadow on the whole ICO infrastructure, which is already in dire need of support. The situation surrounding Benebit shows that ICOs remain a highly risky investment tool and that the majority of existing project verification methods still cannot protect investors from frauds, unless innovative mechanisms of decentralized assessment are used.
In hindsight, if only someone had noticed that the project team’s pictures had been copy-pasted from a public-access school staff page, many investors could have avoided losing their money. However, analysis is easy once something has already happened; it is much more challenging — and more important — to use what happened as a lesson for the future. Here at Smart Valley, we are already working on refining our decentralized project scoring tools. One of the options is to create a photo analysis tool based on services like FindFace. We are hoping to launch a lively and productive discussion of this idea in our community and develop it together with you: it would constitute an extremely valuable experience both for our team and for our users.
The Benebit incident demonstrates once again that the whole ICO market desperately needs more reliable project evaluation tools. As long as reliability ratings for a certain project are formed in a centralized manner by large resources or by small groups of people who personally know each other, there is no guarantee that such ratings will be objective and unbiased (let’s be honest — how do we even know that founders haven’t paid for them?). The only way to identify potential frauds early and protect investors is to make the assessment process decentralized and fully transparent. Of all the solutions currently present on the market, only the Smart Valley multiscoring system (which is described in detail in our first article on Medium) allows to score a project against a large set of criteria, from the team’s experience to the financial model. A demo of our scoring tool is already available at
If you have any ideas on how to identify a SCAM easily and efficiently (or if you are considering investing in a certain project but are not sure about its founders’ intentions), by all means share your thoughts in the comments! Meanwhile, we will follow the situation around Benebit and let you know as soon as something new becomes known.
