A “Scammer” that Never took a Penny

IOTA at the Crossroads (2)

Our “Iota at the Crossroads” article — used the unfortunate public spat in between David Sønstebø and Sergey Ivancheglo in order to examine the deep background to all that mess — has garnered quite a few reads so we thought we might wish to point some other rather obvious but neglected facts in the whole saga and the environment in which it is taking place.

The Era We’re Living In

“All the clever people are full of self-doubt and all the stupid people are very confident,” Charles Bukowski once said. Then he added: “That’s the era we’re living in. That’s the era I don’t want to be a part of. So all you can do is try to go about things differently. Do interesting work and don’t be a cunt.”

It must be a strange feeling “standing on the shoulders of giants” when trying to go about things differently as IOTA does. It must be have been lonely all those years. Unless you have nerves of steel and a good sense of humor it must also be truly sad, to leap forward but look at the trolls and haters and morons as they are hurling insults and slender your way. “When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him.” (Jonathan Swift)

We are not a part of the IOTA Foundation (IF) and have no clue how are they internally coping with the nonsense but outwardly, they are truly leaping forward. On February 8th, 2020 they have already released GoShimmer-0.1.1 that “needs 400% less RAM (1GB+ -> 250MB) and fixes several bugs.” (per Hans Moog’s tweet)

So, the true advantage IOTA would have — once the Coordicide, its approach to solving the blockchain “Trilemma,” is moved from the Alphanet over to the Testnet and finally to the Mainnet — can already be seen in the Tangle’s live performance today; the more transactions per second (TPS) IOTA achieves the confirmation time goes down:

More transactions or higher TPS lead to faster confirmation, i.e. not to network congestion.

Middle Ages Today

During the nightmares of Middle Ages ability to write was considered a true wizardry. If a woman dared to know how to write, it was a witchcraft they dreaded, so the “witches” were burned at stake. The medieval minds of the 21st Century people that are still stuck with the 4 TPS the gigantic and sluggish blockchain somehow musters to perform are a true puzzle. As such they, likely unconsciously for no one truly invests any efforts into understanding “an enemy,” see IOTA as some sort of sorcery that would put spell on their precious blockchain lives.

After all, they are just humans. But do they really need to also be cunts?

She’s a Witch! She’s a Witch!

No one is burning “witches” anymore. Instead, we have online moral justice brigades, trolls divisions and what not in order to scream “she’s a witch”, only today’s “witches” were replaced by “scammers.” So, the “scammer” is the witch of today.

No proof is needed, just accusations.

Throw the first stone, you blameless online hero of today, that’s all you know doing. The louder the better. The more hatred, the more venom, even better. The disease spreads, the madness ensues. Than the chorus maddened by righteous fervor takes over. Trolls’ rabid saliva drools down their social media accounts and they proclaim, “you are a witch” (“scammer”), gloating over the burning stake. Unfortunately, they do not have Monty Python to asks them “how do you tell if someone is a scammer?” They deny their own, badly needed, Renaissance and are pushing us back to the Middle Ages, while endlessly babbling about the “progress” they’d like to see stalled so the “moon” hysteria would shine brighter. “The king is naked” was a blasphemy than and it seems to be the blasphemy today. The crypto king, that morbidly obese, barely moving forward Bitcoin, should not be challenged.

How do you Tell?

It must bear repeating, a background analyses of how those the 65Ti that are now a matter of a public dispute and toxic hatred came to life is presented in our previous “IOTA at the Crossroads” article.

Our alleged “scammer” the “witch” that holds the keys to 65Ti (here) did not touch a penny for years. What a criminal mastermind.

Now ponder this: IOTA was announced on October 21, 2015 and soon-after all the IOTA tokens offered were purchased. In the distribution phase those new token holders had to claim their IOTA tokens. Some did not. David Sønstebø, the asset issuer of IOTA, gave those holders time, all the way up to 11th of July 2017, to claim them. That’s almost two years.

On the last day for claiming IOTA tokens this was asked: “To clarify, ‘claimed and pending’ just means we’ve sent David the email with old address, old seed, new address we are good right? Even if we haven’t heard back?” The answer was given by David’s “Yes” so the deadline was extended! Yet again.

Did he run away with those IOTA tokens on that 11th of July, 2017? No he did not. Instead he had shown patience and will to help the backers, despite their own negligence.

Helping the Community

At that time IOTA kept developing so they released its new GUI Wallet, together with the IRI Release but, our “witch,” immensely busy with the fledgling IOTA project, and the guys gathered around the vision, also introduced its IOTA Reclaim Tool with a detailed step-by-step guide. Another way of helping the community.

It was on Oct 25, 2017.

At that time I myself was helped by both Dominik Schiener and Sergey Ivancheglo to reclaim our IOTA tokens at the time. The two co-founders gave they time and expertise to an idiot n00b in order to help him. I am aware of dozens and dozens of people the IOTA guys had selflessly helped. All that time, our criminal mastermind did not took a penny for himself. On the contrary.

A year later, on October 28th of 2018, when those alleged tokens were last moved, the 65Ti IOTA tokens were worth $0.511439 so it was a $33,243,535 on his hand and yet, still not a penny was missing.


Now think carefully: our mastermind “scammer” had all those IOTA tokens in his possession on December 21, 2017 as well. IOTA was at all time high of $5.13 and he had $333,450,000.00 at his disposal. He was able to, at the flicker of his keys, take them, go to Brazil after “defrauding” the trolls and live on the Copacabana beach and yet, he did not do it. He was too busy with the IOTA Foundation he helped incorporate (“charter”) a month earlier, on November 3rd, 2017.

How many of those righteous trolls casting their holy stones at a visionary would not kill their own mothers for a fraction of that massive number is perhaps worth wondering about for a second or two?

INTERMEZZO — “Not your keys, not your coins!”

We want to add a bit of data about how much the IT cares about its community, despite facing the medieval hatred.

The Bitcoin mantra, “Not your keys, not your Bitcoin” is what Andreas Antonopoulos uttered after the infamous Bitfinex hack. Everyone lost 36% after Bitfinex said “We have decided to generalize losses across all accounts.” Just think about it for a sec; they have failed their sacred fiduciary duty and were incompetent and yet, their clients, everyone single one of their clients had to take a loss because of the Bitfinex’s stupidity. (on Feb 25, 2019, thanks to the U.S. federal law enforcement agencies who recovered lost Bitcoins, Bitfinex was able to recover the funds)

IOTA was never hacked

And yet, after the “stolen IOTA tokens incident” the chorus of haters screamed about the “hack.” In fact, a criminal had created a malicious seed generator for the IOTA wallet, a fraudulent little tool running on iotaseed.io luring naive, negligent people into, de facto, gullibly giving him their keys. If you think I am too harsh toward their stupidity, please DM me your Bank’s name, username and password and I will provide you with a 100% bullet-proof safe and secure new password. (note to those naïve people, no, do not do that, it was an ironical request)

Would the bank help you if I had taken your money after you gave me your keys (username/password)? The question is rhetorical. The IF did not shrug the fraud off and did not say it’s the victims’ problem. Instead, the IF had invested wast resources in helping the Europol. Dominik Schiener, one of the co-founders lead the efforts and, as the result, the stolen tokens were recovered.

No credit to their huge efforts and such a care for the community was given to IOTA. And yet, from time to time someone still go on spewing garbage about the non-existent “hack.”

Belarus Sense of Humor

Other party to this saga is Sergey Ivancheglo, famed CFB. He’s a Belarus and no story about a Belarusian techie mind should go on without noting their peculiar sense of humor:

“What did that coat cost you?” one Belarusian woman asks her friend.
“Approximately 30 tantrums.”
“Yep, it was a little expensive!”

Yes, tantrums are not strangers to the great Belarusian people. And they do tend to get expensive.

Yes, we know, the kid on the cartoon is not a Belarus.

Sadly, his role was that of a petulant child throwing tantrums. Do not think for a moment that we want, by making fun of his tantrums, to diminish his technological contributions to IOTA and the cryptocurrencies as a whole. Even if wanted to do such a thing we would not be able to do it.

CFB is also a legendary troll so he’ll for sure understand that we’re examining his behavior with a kind hard of a good-natured schoolteacher who appreciate his immature pupil’s talents, despite his tantrums.

CFB wanted to take his deserved Board of Directors place with the IF and, because he wasn’t given it here and now, he held his breath, rather went on with his first big tantrum aimed at his co-founders and the IF, unless he gets it. “I will sue you,” “I will not work with Dominik ever again,” you’ll see. He has lawyers. Than he was given the place he did not want at the first place for why would a techie genius be a bureaucrat? I will sue you all if you don’t let me leave. (no he did not say that; this was added for a poetic flavor)

Than he left. (the IF Board of Directors)

Than he sold all his IOTA tokens. (“to avoid conflict” with his new project)

So he was working on his Paracosm Project with IOTA being “the protocol allowing to embed paracosms into the very fabric of humans existence via the Internet-of-Things.” Jinn and Qubic were also a part of his focus, it seemed.

Than he came out with a strange December 31st, 2019 post, Jinn the Trinary Processor. It was strange not because of a political timing of the post (who the hell reads about trinaries on a New Years Eve but us?) but because it did not tell a lot about the state of the Jinn Project, given its six (6) or so years long “stealth development.”

Then he was due with the news, tweeting “The news will be 2-phase. Expect the 2nd phase few days later.” It was on February 1st, 2020. The very next day, out of blue, he had thrown another tantrum:

I notify the #IOTA community that I no longer work with David Sønstebø and am contacting my lawyers to get my 25 Ti from him. He refuses to transfer the iotas to make me act for his own benefit and against mine.

One day he announces a big news about the Jinn Project, the very next day he is again, “contacting his lawyer.” (in fact plural, the lawyers) He will sue everyone. Was he demanding “his IOTA” (tokens) a day before the “news?” Was he blackmailing David? Was David suspicious of his partner? No clue.

What was always a very curios thing for us that we never had a leak, not even a hint, not even now, a week after the tantrum, from the people allegedly working on the JINN processor. Was anyone doing anything at all?

CFB’s Paracosm Project guys are not so secretive


It may seem that by getting a control over 65Ti and subsequently holding it, David Sønstebø acted a tad opportunistically, but we truly do not see how he could have acted differently? Those IOTA tokens were never claimed. It was clearly stated: “If you did not claim your iotas in the automatic claiming period contact @David over at https://slack.iotatoken.com where you will be given further instructions to manually claim your tokens. Tokens not claimed by 11th of July 2017 will be forfeited and considered donations.”

The whole process was as clear as day and honest.

The perspective holders were given ample time, even long after the deadline, to claim their tokens. They never had. They stayed with the issuer. David Sønstebø had never shown nothing but brutal honesty and he had worked tirelessly to get the IF where it stands today. On the shoulders of giants leaping forward. He had never taken a single IOTA out of the disputed 65Ti over the five (5) years or so. The trolls should really stop acting as cunts, but there’s a fat chance they’d do that, so this article is for serious people, those concerned over, supported by nothing but a tweet or two, accusations. (CFG also issued an “ultimatum,” something he has done during the previous mess he initiated, in a Medium post)

Now, David Sønstebø and Sergey Ivancheglo dispute over those IOTA tokens would be none of our business had Jinn Labs project not been somehow interwoven into the genesis of IOTA, into its very fabric.

So the questions stay:

- What the fuck was Jinn Labs doing all this time? (who was in charge?)
- Why is Sergey Ivancheglo not satisfied with the 100% of Jinn Labs, 50% of the JINN tokens, 100% of intellectual property and whatever is there, David had offered publicly (“I’d give him all Jinn IP, engineers, advisors, brand, whatever, and we’d split Jinn Labs’ token assets on the respective networks”), if his vision is so much better than the IF or David’s?
- Why this kerfuffle about meager 25Ti (I am using the number from his tweet request, not the 65Ti in the address David controls) that are valued at $7,961,375.00 at the time of writing if his vision, ICO he’s hinting at and his genius would be worth billions?
- Was David Sønstebø aware what was going on with the Jinn Labs at all times and does he know what is the truth? Or was he blindsided by CFB into believing all is fine with the Jinn development while it might not have been?

The boys will be boys, our dear schoolteacher from above would say, and either of them legends could decide to act childishly, feeding medieval trolls, or maturely. Its up to them.

Giving us an honest, not CFB about David or vice versa, but a transparent answer on the only relevant topic — what has happened / has been happening with the Jinn Labs project, is a matter of integrity. Their respective, individual integrity.

# # # #

In the prior article we wrote “The IOTA Foundation should not stand passively aside, pretending it is those guys’ own issue, unrelated to the IF.” Dominik Schiener, Co-Chairman of the Board of Directors & Founder, also a “Person with legal responsibility” per the EU Transparency Record, replied with:

Dominik Schiener’s Discord comment on the 1st article

We truly wish them luck in resolving this unfortunate, nonsensical issue.

The opportunity that lies in every crisis…,” shall be found soon so the IF would thrive, unmolested by the “BS within.” (although both CFB and the Jinn Labs are now technically without, you get our meaning)

Blockchain Ghost at your service

Spare some cutter, me brothers?

It’s a lot of damn work, researching and writing all this stuff. Hate to ask of you but your support is our most precious source of income.

IOTA address:

IOTA Donation Address

PS A reminder: “IOTA at the Crossroads,” our first article on the topic has been published here.




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Blockchain Ghost

Blockchain Ghost

I live on the blockhain. I dig cypherpunks.

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