This is why ICOs are in disrepute

EOS Huobi Collusion Rumors Spread More Controversy

EOS has a pretty bad reputation for software glitches, but the rumor of cartels and collusion keep popping up.

According to TrustNodes, a spreadsheet has been leaked, allegedly authored by Shi Feifei, a Huobi employee. Titled “Huobi Pool Node Account Data 20180911,” the document details mutual voting and sharing of proceeds from producing blocks in EOS.

Worse yet for the credibility of EOS, ownership in EOS is highly concentrated, with just 10 addresses holding some 50% of all tokens.

The ones claiming to be decentralized platforms often are the worst offenders in governance models, security and honesty.

What can we Learn from EOS?

It’s dangerous to raise $4 Billion in an ICO and EOS might have single-handedly ruined the future of ICOs for us all.

There are only 21 super node bps that verify blocks in EOS’s delegated proof-of-stake (dPoS) consensus system. The question for me is how could voter collusion not be taking place? How could cartels not form in such an ecosystem? Block.one has never appeared like a credible company to me. A public twitter poll on whether EOS is a security that appeared on Twitter in June, 2018, shows most believe EOS is a security.

EOS basically leveraged values of decentralization to raise funds when crypto investors were at their most vulnerable and feverish in the crypto singularity, when Bitcoin’s price saw huge gains. Now there’s more evidence of voting collusion (what amounts to fraud), and I wonder why the SEC doesn’t get involved.

Era of “Decentralization Pretenders”

If you pretend to be pioneers of decentralization and have in EOS what appears to be a very centralized blockchain having just 21 validators, that’s not just dangerous, it’s downright farcical. Dan Larimer has clearly failed again to establish a voting mechanism that makes sense. It doesn’t matter how many years you’ve been in blockchain; it matters what you actually stand for.

EOS reminds us why crypto bans took place on social platforms, where some are claiming EOS is just a clone of Bitshares, with the project now collapsing into a centralized colluding cartel in which massive fraud might be taking place. The funds of investors could be seized and dApps could be frozen. We just don’t know.

Huobi Allegations of Collusion

There’s a very strong likelihood EOS block producers:

  • Are colluding
  • Receiving payoffs
  • Mutually voting

The Token holder Maple Leaf Capital (@MapleLeafCap) alleges so. This tweet caused a storm of reactions in late September, 2018, on twitter.

According to MapleLeafCap, the excel file reveals the “collusion, mutual voting, and pay-offs” that take place between Chinese block producers (BP). Chinese investors may be hacking attempts at public blockchain ecosystems. In spite of a cryptocurrency ban in China, Asian wealth fuels crypto like never before.

As it turns out, four senior executives recently resigned from Block.one — the EOS parent company: namely David Moss, Thomas Cox, Brian Abramson and Correy J. Lederer. In some ways the EOS project makes the crypto movement look like a crypto heist and gives new meaning to some of the shadier aspects of these communities and models.

If you are able to raise $4 billion without a product and have your HQ located in the Cayman Islands, it’s probably not a good sign. The “product” has been full of software bugs, instances of fraud and serious governance anomalies and red flags.

This is not what decentralization looks like, folks. When 12 of the total 21 crypto platform’s BPs are located in China you have to wonder at the possible “integrity” breaches of the system.

Many are saying even if collusion exists in EOS, it doesn’t matter. Blockchain was supposed to enable new levels of trust. If this allegation is true, EOS must be labelled a failure and a fraud or worse.

Blockchain governance really matters. EOS’s on-going controversy with it and its software bugs shows it’s liable to land in hot water with the U.S. SEC in the long run.