IdeaFeX has attempted to raise funds through an ICO, and the results have been highly disappointing. In this short series, I give a postmortem for the ICO / cryptocurrency market. It is not a postmortem for IdeaFeX for a simple reason, and it follows in spirit the points I have made in the Make Blockchain Work series: these analyses highlight the fact that the future of crypto assets must be backed by real-world assets.
In Part 1, I cover a common complaint by casual observers — scams. However, I must say reality is truly more complicated.
One may say that where there is money there is scam. Still, the society has functioned reasonably well over the centuries. You would hardly ever meet a person and think s/he is a scammer until proven otherwise. Yet during our efforts to raise funds for our project through an ICO, this is exactly what we have grown to do: influencers, marketers, advisers, exchanges, and investors… you name it, scammers have tried it.
By far the most common type of scams is the “influencer” scam. The ruse is simple: The scammer pretends to be a YouTuber; s/he will make a good video for your project if you pay him/her. The price can range from 2 ETH to 6 BTC. They will insist on ETH or BTC. If you turn it down, they will probably accept 50% in your own tokens. Some will eventually accept 100% payment in your tokens.
Obviously, if you cared to confirm with the influencer in question, you will see that this is a scam. What is interesting is that there are so many scammers but so few “influencers” that scammers run into each other. Take this brief exchange for example:
(small typo here)
Scammer A says Scammer B is “one of my consultant [sic]”. Well, Scammer B is himself a scammer (by his nickname you probably have figured out): his account is “featured” on the real channel as fake.
These guys will try to sell (a) social media followers, (b) fake comments on Bitcointalk / Reddit / Telegram, and © other things fake. Below is an example:
(links omitted because they are not so useful)
There are two possibilities:
One, the guy is real, and it is the public that takes the bite. This is quite common. We have long given up on BitcoinTalk because it is filled with marketers. There are always “meaningful conversation” in those hot threads. What we post gets pushed to the second page within minutes. I also have a feeling that there are more marketers than other visitors on that forum.
Two, the guy is fake. This is almost 100% the case if the “marketer” is from Telegram. Their accounts usually become “Deleted Account” in a few days.
Both scenarios will continue a theme that I will highlight at the end.
These guys are mostly on ICOBench. While ICOBench has been an easy-to-use platform, and we know they need to cover their bottom line somehow, one nasty aspect of their service is the bastardization of the word “adviser”.
You see, in the real-world advisers are highly experienced individuals who will give meaningful advises but due to commitments cannot work extensively on a project. With ICOBench, anyone can be an “adviser”. Everyone has: We see many who hardly got out of high school become “serial advisers”.
Often, they want you to pay them but give no advice. If you ignore them or refuse to pay, they may write a nasty rating for you. Some may even offer to “work for you for free”, just to get on as many projects as possible to improve their own score on ICOBench. Don’t worry, no work will ever be done.
Another common scam is to sell “listing” or “IEO”. These guys usually claim to be from a major cryptocurrency exchange. Not to bore you, they are scams, some even come with a “SCAM” tag attached:
These are the worst timewasters. They will frequently ask you to go to another place to have a face-to-face meeting. Their goal is to take your money; don’t fall for it. What are some clear signs they are fake?
One, their LinkedIn account has no picture. They will claim to be running a “family office” or other PE fund, but have no other experience. They will usually claim to have gone to HBS, Stanford, or ETH (the school in Zurich).
Two, they have no idea what your project is about but want to invest 500k / 1M / 2M… (maybe start with this one)
There are also the traditional “Telegram” kind of fake investors:
(offensive language censored)
There are two clear threads:
First, if someone DMs you on Telegram, odds are not good.
Second, there seems to be more scammers than real people they impersonate. I will get back to this point in the following parts of this series.
IdeaFeX is the marketplace for tokenized real-world assets. We will launch a working product in 2019. For more details about us, we encourage you to follow us on Medium and read our Make Blockchain Work series as well as our White Paper.
This series is an extension to the original ICO series that I have written months ago.