Honest Shipit ICO review

Note: this is an English translation of the Russian article we wrote recently with an in-depth analysis of the Shipit ICO.

ICO Website | White Paper | BitcoinTalk | ICO Chat | Prototype

This review has been written by the “Avocado Approves” Telegram community and supported by the “Golden Borodutch” Telegram channel. To make it simple for the readers, the review is split in six parts: product, advisors, team, partners, legal and conclusion. We would kindly ask the project team to answer to all the questions in bold contained in the following review.

Worth noting that everything written below only represents the personal opinion of the author, which fully complies with the Fair Use laws and the First Amendment. It’s is in no way trading advice, and all the information was gathered from public sources.

Product

Shipit is a platform for budget shipping via travellers. They’ve already developed iOS and Android apps but without blockchain, smart-contracts and cryptocurrencies yet — which should become the main selling point for the product. Shipit promises to include the following 5 parts into their product:

1. Blockchain, required to decrease the chances of loss, damage or delays of the shipments by providing the public rating system for the couriers. Smart-contracts are needed to eliminate payment issues.
2. Cryptocurrency wallet capable of quick currency exchange, required to pay for the shipments.
3. Senders insurance deposits. Couriers with a low rating on the platform will have to deposit the amount equal to the package cost prior to getting the order. After the successful shipment couriers gets the deposit back as well as the money for the work well done.
4. Factoring is like a deposit loan. If a courier does not have enough money to cover the package cost but has a high reputation, then Shipit can cover the package insurance deposit themselves for a particular percentage of the work compensation. Factoring will be covered by one of the Shipit partners — Re:factor.
5. Mail forwarding is a budget goods purchasing from anywhere in the world using the network of middlemen to deliver goods even to the territories not suitable for shipment at particular services.

Aside of all of it, Shipit emphasizes their focus on the security: various types of verifications, protection against multiple accounts registrations, product photo verification, optional delivery and damage guarantee, as well as automatic (neural networks) and manual shipment request moderation.

Let’s go over the product questions.

1: Blockchain

• If a courier did not notice that a shipment has been damaged prior to the order, how would courier proof their innocence?
• Same question about the contraband: will you insure the couriers separately from the senders? Do you account for possible legal costs for the couriers?
• Ratings will include not only the couriers but also the senders, right? If so, what senders info will be stored publicly?
• What will be the requirements for the travellers and couriers?

2: Wallet

• Have you already obtained the financial license to act as an exchange of the crypto assets for the fiat currencies? If so, can we see it?
• What will be the fees for the currency conversion?
• How will you technically implement the currency conversion?
• What currencies will the wallet support?

3: Deposits

• Why do you call a simple escrow “deposit”?
• New couriers without reputation will not be able to make money on the platform without depositing their own money?

General product questions:

• Do you have any plans for the Shipit web-version?
• What types of the neural networks are you going to use to form the rating system and shipment request verification?

We have implemented the technical part of the Netverify API integration in order to integrate multi-factor verification tools in future
— Russian White Paper, page 9.

• Can we see the code for the Netverify API integration?

App has the feature of uploading photos from the local storage and the Internet disabled. All the photos are moderated. Objects on the photos should be unpacked and clearly visible.
— Russian White Paper, page 9.

• Why did you disable the photo uploading feature? How will you technically recognize the process of taking photo of a printed photo?
• Why did you decide not to publish the source code of your product?
• Why do you call your mobile app an MVP when it does not have neither blockchain, nor crypto-wallet, nor rating system, nor verification, nor any other promised features?

Advisors

Shipit has 13 advisors. We have reached out to all of them to verify their involvement with Shipit. We will update the review per receiving more responses.

• Roger Crook [in|fs] — global expansion advisor. Ex-CEO of one of the DHL departments. Nowadays he is a CEO at the Capital Springboard financial company. We have contacted him on LinkedIn, awaiting response.
• Sydney Ifergan [in|fb|tg] — digital marketing specialist. “One of the top-20 experts on ICObench” — which means absolutely nothing as ICObench rates shady projects with 5 stars. We have contacted him on LinkedIn, Telegram and Facebook. He answered on Telegram that he didn’t understand the question and our incentives as well as reputation. After this he hasn’t been online yet. Awaiting response.
• Rumen Slavchov [in|fb|tw] — PR and marketing specialist. Consults plenty of ICO’s. Contacted him on LinkedIn and Facebook, awaiting response.
• Mofassair Hossain [in] — PR and marketing specialist. The last time when we contacted him about the involvement with ICO DEEX, he rejected to comment because of the signed NDA. Contacted him on LinkedIn, awaiting response.
• Dean Karakitsos [in|fb] — ICO process advisor. Founder of the Bloqchain Science company, that integrates blockchain into business. Co-founder of Bloxy — blockchain analytics startup. Co-founder of Qrypton trading platform, currently in the process of conducting the ICO. Contacted him on LinkedIn and Facebook, awaiting response.
• Naviin Kapoor [in] — blockchain specialist. Answered on LinkedIn that he consults Shipit on the ICO process and on how to use blockchain in the product. Dedicates up to 10 hours a week to the project.
• Alex Linenko [in] — business tokenization specialist. Answered on LinkedIn that he consults Shipit on business tokenization and investment relations. Dedicates up to 10 hours a week to the project.
• Andrey Korotkov [in] — business-analytic. Answered on LinkedIn that he consults Shipit ICO but rejected to answer how and in what sense he advises the project because of the signed NDA.
• Artem Eremin [in|fb|tg] — logistics and supply advisor. Was a CEO of the Point Logistics logistics CIS company for over 7 years. Answered on Telegram that he consults Shipit on the logistics topics: customs issues, couriers relations. Generally dedicates around 3 hours a week to the project.
• Alexey Zarya [in|tg] — business-analytic. Contacted him on LinkedIn and Telegram, awaiting response.
• Marat Mukhametzyanov [in] — legal specialist. Founder of the Luna law firm, that helps to refund the money from broker. Contacted him on LinkedIn, awaiting response.
• Sumit Mehra [in|fb] — mobile development specialist. Co-founder, president and CZTO at the Y Media Labs development agency. Contacted him on LinkedIn and Facebook, awaiting response.
• Vivek Rajanna [in|fb] — technical advisor. Senior engineer at the Y Media Labs agency. Contacted him on LinkedIn and Facebook, awaiting response.

By the moment of writing we have only received 4 responses out of 13.

• Can you ask the rest of the advisors to answer us?

There is a huge chance that advisory board can include people who just sell their faces. A lot of Shipit advisors appear as advisors at other tens of ICO’s and are included into the list of the top experts on the ICObench platform.

IMHO, if independent analytics check all the top experts from ICObench — there is a high chance of charging experts with falsely rating shady projects with high stars. In our case we have such “specialists” in the marketing department.

• Why do you even need three marketing advisors?

Team

Shipit team consists of 15 people and 4 more people from the Y Media Labs agency who help with the Shipit brand development. Almost all of the team members are from Kazan, Russia.

Let’s start with the four cherries on the top: co-founders.

• Iskander Karimov [in|fb|tg] — CEO. As Iskander mentioned, his first job was in 2012 as a financial analytic at the Merrill Lynch financial company, where he has worked for 5 months — possibly, just a university internship. Then he has spent a year as a project manager at the Odgers Berndtson HR agency. Currently, as Iskander has mentioned on his LinkedIn, starting with 2015 he is a board of directors at the IGS Group Russia holding company — we have found no proofs to it. Also, Iskander is a strategy advisor and co-founder of the clothing company Chukcha. As well as (not mentioned on LinkedIn) he is a partner at Sextant in Miami.

Did we mention all the Iskander’s experience? What IT projects did he launch? Where did Iskander work with the logistics?

• Nikolay Grishakov [in|fb|tw] — COO. Nikolay is pretty secretive when it comes to the social networks and has not disclosed mush experience: less then a year as a marketing assistant at the American Chamber of Commerce in Russia; less than a year at the redactor assistant at the Top Gear car company; a year as a financial analytic at the Honeywell company; and a year as an economist at the FESCO logistics company.

Has Nikolay worked at senior positions prior to Shipit? Are there any proofs of his experience at the FESCO logistics company?

• Azat Shaidullin [in|fb] — strategy advisor. LinkedIn is almost empty — he only mentioned that he has been working for three years as the CEO of the IGS Agro mushroom growing company, situated in Tatarstan (Russia). No more information about Azat has been found.

Shipit website claims that Azat has managed several IT projects during the last 7 years. How were these projects called?

• Artur Iskhakov [in|fb] — head of HR. Artur has only mentioned on his LinkedIn the fact that he works as a CEO of the IGS Group consulting company since 2008, even though the company was registered only in 2010. Time traveller? Confirmed. Though, Artur does not mention Shipit ICO anywhere. However, Shipit does mention Artur: “Business development expert and founder of several IT startups. Artur has been an entrepreneur sinse 2007 and has 10 years of experience with the LogiTech and FinTech companies. Experienced HR-manager at IT companies” — how are the IT startups founded by Artur called? What companies did he work with in LogiTech and FinTech sector? Where did he work as an HR manager before?

Out of four co-founders the only one experienced with logistics is Nikolay, and only for one year as an economist — and it hasn’t been proven yet. Also none of the co-founders have any verifiable experience in launching IT products.

How will the Shipit team launch all the parts of the product without having the necessary relevant experience? If you have experience, please prove it with any of the launched an successful projects.

Shipit development team consists of five people.

• Marat Akhunzyanov [in|fb|tg] — CTO. Github and LinkedIn are empty, but Facebook has some info. Since 2009 till 2015 worked as the CEO at the “Kazinaki” creative agency, website of which no longer works. Since 2015 works as a lead developer at Alfa-Forex — but we haven’t found any proof to this. Worth noting that we found on the Internet accusation of Marat of fraud and not completing the website development work. Shipit website claims that Marat has developed many digital network and CRM projects for American companies.

How are the American companies Marat worked with called? What projects exactly has he been working on?

• Federico De Faveri [in|fb|tw] — blockchain developer. In 2015 while going through the online Harvard courses wrote a Python app to calculate the data about food by measuring the weight on the USB scales. Sources haven’t been published so we can’t check this info. Spent 5 months in 2017 at an engineering internship at Blubeta company, that does product development. Github is pretty weak, but he does have some Solidity, Python and JS projects. Federico mentioned on his LinkedIn that he has founded the Keenn company in August 2017, which half-ready portfolio website contains 15 projects including Shipit. We asked him what exactly is he doing at Shipit. Awaiting response.

What blockchain projects did Federico launch before Shipit?

• Alexander Sazonov [in|vk|tg] — backend developer. Has only mentioned on LinkedIn that he has been working as a web developer at the Alfa-Forex trading platform since 2015. According to his titles, GitHub and overall activity on the Internet, he is an inexperienced developer. Shipit website claims that Alexander worked as a lead developer on a text-correction governmental project — how is this governmental project called? What else did Alexander worked on?
• Artem Nagibin [in|fb|tg] — frontend dweveloper. GitHub contains just two test modules written in PHP. Experience is pretty short as mentioned on his LinkedIn: 1 year and 4 months as a programmer at some “Logos” publisher and 6 years at the Webmechanic marketing agency. ON his VKontakte he mentioned that he works at the IT Prime studio, that does website development — but we could find no proofs to this fact. Also we haven’t seen Artem mentioning Shipit as his employer so we asked him on Telegram about it. Artem has answered, that he worked with Shipit but left the company since.

Why do you claim that Artem is an acting team member when he isn’t working with you anymore? Who does the frontend development now and what is their experience?

• Alexey Fedorov [in|fb|tg] — software engineer. No open source projects. LinkedIn is filled with almost 20 years of experience: full-stack freelancer, worked at Exigen Services IT company, led the development of a couple of IT projects, that can no longer be found on Google. We could only verify his last 7 years of experience when he worked on the Startpack cloud system. System is pretty workable with nice numbers (10 000 visitors a week). Also, Alexey develops the Firework desktop app (website shortcuts). He has verified his involvement with Shipit on Telegram even though he mentioned it nowhere.

How will the Shipit development team implement all the product parts not having enough relevant experience? They don’t have any mobile app or neural network experience! If they have sufficient experience of launching relevant products, please provide the proofs.

And last but not the least is the marketing team consisting of five people as well.

• Damir Yalalov [in|tg] — CMO. According to his LinkedIn, he works in marketing since October 2015. We could only verify experience with the Zetta ICO, that develops review system on blockchain. Zetta is full of issues: from the token legal status with the team promises to the technical implementation with the expired SSL certificate.
• Shivarjun Shrivastava — marketing manager. Social networks profiles exist, but they are either private or empty [in|fb|tw]. Co-founded the Keenn product development company with Federico. Update: Shiv reached out to us on Twitter and let us know that he has never been a part of the project, he claims that Shipit used his name on their website without his permission.
• Anna Aturyan [in] — PR manager. Social networks are empty, mentions Shipit nowhere. No publicly verifiable experience.
• Liya Shaydarova [in|fb|vk] — investor relations manager. Actress starred in a dozen of short and two full-length movies. Mentioned on LinkedIn and Facebook that she handles the international PR and investor relations at Shipit.
• Arslan Rakhmatullin [in|tg] — community manager. Canno be found on Google. Worked as a translator at a football club in Kazan before Shipit.

Shipit team answers questions at their Telegram group pretty quickly and adequate. It’s a good sign but doesn’t add any experience to the team, unfortunately.

Partners

We decided to reach out to partners of Shipit because we were curious how they would integrate the service.

• Y Media Lab — product development agency. Shipit claims that thay work with Y Media Lab to develop the products. Shipit also claims that some people from this agency work with them as a part of the project team. After 3 weeks of waiting for the response to our inquiries to the advisors and team members from Y Media Lab, we received no responses. We have reached out to Y Media Lab on email to confirm the partnership with Shipit. Awaiting response.

Can you ask YML to send us a response?

• Re:factor — ongoing ICO of the project intended to provide postponed payments platform. We have wrote to their Telegram group, after which a re:factor manager confirmed the partnership with Shipit. Refactor will support Shipit with providing postponed crypto and fiat payments.
• OpenGift — ongoing ICO of the project intended to create a crowdfunding platform for open-source. The CMO of OpenGift has confirmed partnership with Shipit.

If Shipit won’t have the code open sourced, as claimed by your manager, why do you need OpenGift as a partner?

• Descrow — successfully funded ICO of the project intended to create a safe ICO investment tool. СЕО and co-founder of Descrow responded, that they are not partners with Shipit.

Why do you call Descrow your partners when in fact they aren’t?

These were the partners of Shipit mentioned in the Russian White Paper on the page 34. But a Shipit manager in their Telegram group named two more partners.

• IZX — PokemonGO like game, but users look for free tokens instead of pocket monsters. IZX manager claimed that Shipit has published their token in the IZX game.
• StartICO — paid ICO investor private profile service. Shipit used their investor private profile. Also StartICO mentions Shipit as their partner on the StartICO website.

Legal

As the project’s team claims, Shipit is registered in Delaware state as a C-Corporation under the name Digital Logistics Inc. Founder of Shipit (Iskander) mentioned in private messages on Telegram that they haven’t decided on the ICO jurisdiction yet but will decide on it before the start of the public token sale (September 1, 2018). Also Iskander noted that they consider registration in Saint Kitts and Nevis, Singapore or Hong Kong.

• Can we see the registration papers of Digital Logistics Inc. in Delaware?
• Why don’t you use already incorporated legal entity in Delaware for the ICO?

Company is consulted by the Luna law firm, co-founder of which can be found amongst the Shipit advisors (Marat). This company also wrote the legal opinion for Shipit with the results of the Howey Test claiming that the Shipit token is of type Utility. Shipit team claims, that they are planning to get a Legal Opinion from one of the financial regulators before starting the public token sale.

• In what jurisdiction and how are you going to get a legal opinion from a regulator?

SHPT token function is internal transactions: decreasing the fees on shipping, refactoring, access to the senders and couriers database, increasing the rating with tokens and discounts on ads for advertisers.

• What kind of information will be accessible on the database of senders and couriers for the token holders?
• Shouldn’t rating only depend on the actual reviews and work criterions? Why trying hard to raise the rating if it can simply be bought?

Everything was great until Shipit promised to list on the centralized exchange markets which raises the question about the token status and crushes all the claims that SHPT token is intended only for the internal platform use. Shipit team should not list on centralized markets in order to avoid legal issues in future with the regulators. As soon as token lists on the centralized markets, it fails Howey Test and becomes a well-regulated security.

• Why do you need to take the risk of listing on the centralized markets that makes regulators and investors question the legal status of your token?
• If a financial regulator prohibits the listing on centralized markets, how will be the token infrastructure function? How will tokens come back to the users after paying for the goods and services? WIll users have to buy the tokens from Shipit directly?

Also SHPT token purchasing is prohibited in USA, China, Singapore and New Zealand. Even though Shipit claims it’s prohibited, anybody can buy Shipit tokens without going through KYC.

• Why do you prohibit token sale in some countries? Does it mean that these countries can later proclaim SHPT token as a security?
• Why didn’t you make KYC compulsory?

Shipit team promises to return all the raised funds if softcap will not be reached. Also they claim that the funds are collected not through a smart-contract but using a hybrid investor wallet protection.

• What will be your proofs of reaching the softcap? Will you be able to just fake the numbers even though the softcap isn’t reached?
• Did you provide tools to guarantee the investment return (i.e. escrow agreement) if the softcap isn’t reached or if the team spends the funds carelessly?

Conclusion

By the moment of writing Shipit token sale was claimed to be “private”, so we could have gone easy on it. However, apparently anybody can go to the investor private profile on their website and buy SHPT: no whitelist, no KYC, nothing is required at the moment.

• If anybody can buy Shipit tokens right now, what will change when the sale goes “public”? Why to you call a public sale “private” even though it isn’t?

Worth noting that this project becomes more and more similar to BlaBlaCar and Uber: saving money on one side, simple labour on the other side with the service taking a cut of each transaction. Pretty scalable but will the Shipit team have enough experience to balance security, speed and cost of the shipping? Let’s wait for the team’s response.

Adding comments of Nikita Kolmogorov:

At the first glance, Shipit isn’t that bad. Unfortunately, as soon as we dig deeper, we see extraordinary number of issues: lack of the relevant founders experience, weak social presence of some team members and advisors, jurisdiction uncertainty, lack of the developers with the relevant experience, false partnership claims, false employee claim, token legal status contradiction (it’s claimed to be utility, however is going to be publicly traded), token purchase limits. In particular, it’s pretty alarming that US company doesn’t allow US citizens to buy tokens.

And the deeper we go, the more it looks like a scam schema: literally nothing is ready and nothing is thought over by the team. Any person with a bit of logic will see so many contradictions and loopholes in the concept and implementation details right after reading a bit of the White Paper.

This is exactly the reason why this project will either never launch or nobody will use it because of lack of the demand. We have submitted official legal requests to the US authorities and regulators to investigate the Delaware company activity. US does not tolerate scammers and I hope that the founders will go directly to jail for scamming the investors, as well as the “legal” company that gave the “legal” opinion for obviously a security token that it is utility will loose it’s license. Don’t invest in this company if you don’t want to loose your money in the long term.

P.S., their MVP isn’t an MVP at all, it’s a crappy app that looks like it was made by a couple of recent university graduates that has very distant similarities with the promised product.

Update from Dec 5, 2022: Shiv reached out to us on Twitter and let us know that he has never been a part of the project, he claims that Shipit used his name on their website without his permission.