Prodeum SCAM traces lead to other projects not associated with Lithuania, investigation confirms
Lithuania is good at adopting new technologies. Not only we have a real boom in new technical centers of global companies, we have managed to get on the financial maps as one of the most promising fintech markets. And we talk here about being able to build real products and become profitable in less than a year.
By a rough estimation of the Bank of Lithuania, alongside with the worldwide crypto mania, Lithuanian or semi-Lithuanian teams had successfully raised more than 300 million in ICOs. Most of the projects are well known outside EU — “Bankera”, “Monetha”, “Bitdegree”, “carVertical”, “Iungo Networks”, “Mysterium Networks”, and others.
In January 2018, Bank of Lithuania made a public statement on their attitude to ICO: they don’t prohibit it in Lithuania, and, moreover, they support new financial instruments and ready to help companies, who are planning to launch an ICO, to define their token correctly.
Last week the global media published articles like “Cryptocurrency Scam Site Disappears, Leaving Only the Word ‘Penis”, making clear connections to Lithuania. Why Lithuania? Because the website of a scam ICO “Prodeum” introduced well know Lithuanian blockchain ecosystem members as their core team. Also, ICO’s White Paper had claimed “Prodeum” had an office in Lithuania.
Being a part of Lithuanian blockchain ecosystem, Business Hive Vilnius team was really concerned about this situation and started an investigation of this case.
The first results came out rapidly, the ecosystem members, mentioned at “Prodeum” website knew nothing about this ICO, their identities were simply stolen.
We have some serious cybersecurity experts in our technology hub and accelerator, starting from our CEO, Marius Pareščius, so we decided to go deeper into this case.
So here are some interesting facts about this scammer’s team. We are not going to stop at this point, the investigation is still ongoing. We are releasing this information now to warn international crypto-holders and community members.
– No Lithuanian routes were traces, presumably, Lithuania was chosen because of its ICOs’ success story
– All the projects, launched by this team, had a clean and grammatically correct language, judging by which we can assume that some team members were native speakers
– We discovered Magnalis (MGNS) — a project, which is very similar to “Prodeum”. Tokens XMGL and XMGN were issued. We managed to recover the White Paper, which showed us the same story — identity theft. https://www.docdroid.net/Xs3K9US/magnalis-whitepaper.pdf
Also, some other similar SCAM projects were created, meet a few of them:
– International Federation for Produce Standards Token — IFPS — https://etherscan.io/address/0x8e35ef6acd0a6f168cc028ca96be987cbb048e12
– Lithuania FDA Asset — FDA–- https://etherscan.io/address/0x5a8a46da5f6e2207ec561ef9fde7ab6894088179
As for Prodeum ICO, 3 different accounts were used to gather funds:
– First one: 0x931D387731bBbC988B312206c74F77D004D6B84b
– This account was used to receive funds from Poloniex(Jan-18–2018 10:41:03 AM +UTC) (TxHash: 0xe00c5de7a36d2de36b65eb6152cfb95da1aca9b95fe53db0acd77ca72ca784b1) and to create PIIT(Jan-18–2018 10:44:00 AM +UTC), PRDM(Jan-18–2018 10:49:01 AM +UTC), IFPS(Jan-19–2018 06:21:53 PM +UTC), FDA(Jan-19–2018 06:25:59 PM +UTC) new smart contracts (none of them were used yet, but we continue monitoring all of them for the future activities).
– Later this account received extra funds from suspected project owners via Poloniex (Jan-19–2018 07:37:05 PM +UTC) (TxHash: 0x865106724fa10c57709b885214192f2ec598c8808b60c0f90e5dc7db7e1deeb3)
– First transactions was made from this wallet and went to 0x4b841478a08d72bf0467bb4df197822615122d82. This is exactly the same wallet that was used for other scam projects, to collect Ethereum and pass to Binance.
– For cashing out — this team sent all the funds to Poloniex exchange 0xf79acb541519922ab4b545e2079c059c7f08325f
Despite the many different numbers mentioned in the media, the real amount of funds Prodeum SCAM ICO managed to raise was a bit more than 43 ETH.
Also, global blockchain community managed to spot the scammy system, here’s a link to https://yuki.la/biz/5986620
How to avoid this sort of scam
Even if you are not a security expert, here are 5 simple steps that will help you to run a check in 15 minutes:
- Check, that team and advisors really exist and they are the industry experts. Linkedin and Twitter profiles will help you, so will the Facebook profile and the Medium blogs. It’s ok if a person prefers one platform to another (for example, he/she is not very active on Twitter and only has a few followers, however, has quite a number of the connections on Linkedin). But if a person is not really active in any media, run a double check on the rest of the team.
- Check, that identities of the team members are not stolen. This one is quite easy: check the social accounts of the team (Linkedin, Facebook, Twitter). Several accounts of the same person? Doesn’t look good. None of the team members mention any ICO? Looks really bad. Stay away and report them to the community.
- Check, that advisors identities are not stolen. Check, if the advisors and team members are connected in social networks. If the core team members are not connected with the advisor on Linkedin or Twitter, it looks quite weird. To resolve your doubts, simply contact one or two ICO advisors on Twitter or Linkedin and ask them, if they are in. Also, google the key advisors. If he/she is a part of 20 ICOs at the same time, looks like he is not really involved in any of them.
- Google the CEO of the project, use google translate for other languages. Are the mentions of the CEO corresponding with the subject of ICO? Does the CEO have sufficient public track record? (NB: if you don’t find much about CEO, searching his name in latin transcription, try to use the original transcription in his/her primary language. There is nothing wrong, if a person has much more media mentions in his/her native language, however, the lack of those mentions might look really suspicious.)
- Ask the community. There are always people discussing the ICOs on different platforms. Just google the name of the project, and if there aren’t much about it, ask at popular forums like bitcointalk.
The story about “Prodeum” hasn’t been ended yet. We continue tracing all the projects and search for any data we may get. If you now have some information, please drop us a message.
About the investigation participants:
International Security Cluster and International Blockchain and Cryptocurrency Cluster are the part of Business Hive Vilnius infrastructure — one of the oldest startup incubator and technology hubs in the Baltics. Primarily focused on hardware, security, blockchain, AI, fintech and enterprise software startups. BHV offers its residents: introductions to investors and financial networks, mentorship, events, and support from leading industry experts.
BHV was founded by Marius Pareščius — a well-known Lithuanian IT and security expert, serial entrepreneur, and IT-counselor to the Lithuanian Parliament. Being one Lithuania’s IT pioneers and the managing director of the Lithuanian Cluster Association, Marius shares his expertise by mentoring startups from Lithuania, the CIS and European Union states, along with participating in industry workgroups within the EU Institutions, and speaking at various industry conferences worldwide.