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Detecting Scams:Interview with ICOEthics

As a crypto community, we have a responsibility to protect it’s moral foundation. At TalkBitcoinTalk, our main focus has been on education and today’s article is one of the most important parts of Education in Crypto today, the method for evaluating integrity in ICO projects.

It’s an unfortunate truth, but every great innovation comes with its great schemers. If there is one thing we learned from 2017’s ICO craze, its that people are greedy, and there are other people who will do everything in their power to exploit that greed.

ICOEthics is at the front of the battle, spending hours and hours meticulously researching projects at the base level. They arent going to assess market size or product potential; thats not their mission. This team is focused on making sure that the team’s are real and that they aren’t trying to make a quick buck off the backs of the hard working projects in the crypto space. We had a chance to learn more about their process, how the ecosystem can do a better job at finding them, and how this mission will make everything in crypto better. If it weren’t for BitcoinTalk, we would never have had this team in the first place.

How did you first hear about BitcoinTalk?

Some friends were participating in airdrops and asked us to verify some of the airdrop projects for them. They sent links to the BitcoinTalk forum. That’s how we discovered the forum.

How did you get into scam hunting?

Helping friends participating in airdrops to validate some projects they were considering. After we noticed that so many of them were using stock images and nobody said anything, we then started to be active and calling them out, questioning the validity of the airdrop project.

Walk us through your process. How do you know for sure a project is a scam? What do you look for?

Team — a fake team is a scam / stealing people’s identity is a scam and a crime.

Impossible ROIs — here is one example of many, this one we found on 06/12/18: (https://bitcointalk.org/index.php?topic=5081123.0 )

Plagiarized whitepapers — here is one example we found on 05/12/18 — the whitepaper was copied/plagiarized word for word: https://bitcointalk.org/index.php?topic=5080789.0

These 3 factors are the most important to classify as a scam.

How do so many scams fool people?

  1. There is no regulation
  2. Most investors don’t research on what they are investing in.
  3. People believe because a project is posted on this or that website that they can trust the project. They forget that many of the ICO listing websites are into this for money, and many of them continue promoting a scam even after they are exposed. Here is a very good example of these type of sites, with currently over 150 scams listed. They know, but they don’t care, at least from our observations.
  4. People want to research a project, but they don’t know how.

What do you think ICOs and blockchain projects could do better so that scams are easier to detect?

Real projects should provide a video with the team, clear visible photos of each member with a valid profile.

There should be an independent organization, such as BitcoinTalk forum, a non-profit forum, to verify and approve the team. Another option could be that the government [has a process] to identify the team members of ICOs — which is an option, [but] that will take away self-regulation.

The more people know, the more people spread the news, which results in less damage a scammer can cause. Any money a scammer makes, they will create more scam ICOs.

I know that some teams like to remain anonymous, and team is a common area to catch fakers. Have you ever made a mistake in calling a legit project a scam? When is it hard to tell?

If they want to remain anonymous, then they should not be posting any photos, much less fake photos! Most of the scammers come out with an excuse that they used this or that photo because they want to be anonymous. But they can’t be anonymous by stealing someone’s else image pretending to be their team member.

Here is a good example: https://bitcointalk.org/index.php?topic=4659027.0 Go to page #2 post # 30 and read what the scammer said (“….I told you we chose to operate anonymous that’s why we used the pictures of those people in question….” ).

As far as making a mistake, everyone makes a mistake, but we don’t recall us making a mistake up to this date! All of our accusations are objective and accurate, with evidence provided. It is difficult to tell when there is no information about them, no team, no whitepaper, etc., but they end up with no investors as well. This, to us, is a big indicator of a scam, as a real ICO should be transparent and provide details for a potential investor to review before making a decision.

How important do you think BitcoinTalk is to the crypto world?

It is a very important forum for the crypto community, but they are lacking in the moderation of scams.

A scammer will keep returning and posting more scams. If the forum administrators could ban those scammers forever, delete/suspend/block their posts, we think we would see less scammers on the market.

What was your proudest moment in finding scams? Tell us a story about a really hard to catch scam and how you caught them.

We are proud of every scam that we can detect and especially those that delete their website immediately after exposed.

There are a few hard to catch scams, but there is one in particular: — Help-Token or Help-Coin.

This scammer used charity as their foundation. It was hard due to the amount of time that it took us to find all faces of the scammer. The main scammer photoshopped herself with many hairstyles, etc. She had many profiles on the internet with many names.

https://bitcointalk.org/index.php?topic=4872748.0 (main post)
https://bitcointalk.org/index.php?topic=4875815.0 (investigation with pictures)
https://twitter.com/ICOEthics/status/1028348050878726145 (twitter post with images)

We had some challenges before, but we do like challenges. Pretty much low quality images of the team, distorted image, etc.. And we had to rebuild some of them to find the correct image. We have our special ways for searching images.
https://bitcointalk.org/index.php?topic=5025818.0
https://bitcointalk.org/index.php?topic=4819737.0
https://bitcointalk.org/index.php?topic=4831344.0
https://bitcointalk.org/index.php?topic=5045079.0
https://bitcointalk.org/index.php?topic=5063958.0

What do you think about today’s market?

Today’s market is being ruined by the scammers. If we don’t do something about the scammers, we will see this whole industry collapsing due to the loss of credibility/reputation. We expect that if these scams continue, the media will get more interested in the story, and once the story reaches the masses, then the future of cryptocurrency may be at its end.

Would you consider leaving cryptocurrency as a job in today’s market?

Very unstable job, but at this point, there is so much work to do to identify these scams and strengthen the cryptocurrency market so that it will become a valid and important market for potential investors.

In order of importance, how would you rank the following? Whitepaper, Github Link, ANN, Bounty Campaign, Tokenomics, Team, Product Potential, Media Exposure

1 — TEAM — transparency is important in this market loaded with scammers.
2 — Whitepaper — the foundation of every project should be objective and plagiarism free.
3 — Github Link — we can see how active is the developer
4 — Tokenomics
5 — Product Potential — as long as it is not promoted by ICO’s listing websites
6 — Media exposure is important to make a successful ICO
7 — ANN — this is very important, as investors can read about new coins/tokens/cryptos.
8 — Bounty Campaign — we believe this is like a cancer and it is helping to spread the scammers on the market. There are many serious ICO Projects, but they all getting hurt because Bitcointalk Forum does NOT moderate scams. Once a scam is found, rarely a bounty manager shut downs the Bounty Thread of such scammer. Many times the thread is created by the scammer themselves — Many of them are now creating self-moderated threads — which means if anyone posts any bad comment, the comment will be deleted. The other thing is we are seeing many bots on ANN Bounty threads helping to boots a scam campaign.

Finally, how could our audience help you out? We know that this takes alot of work. We want to help!

We do work a lot daily trying to find and expose scams. The community can help us in many ways.

Join us on Twitter and re-tweet our tweets: https://twitter.com/ICOEthics
Helping to spread the news of newly discovered scammers is one of the best way to help us to inform the community about such scammers.

Sending us information about possible scams, so we can investigate further. info@icoethics.com. Creating blogs, posts, etc about scams found and calling the scammers out on their social media, such as telegram and posting a message, or link to our investigation page so people on their social media accounts will be aware of the scam.

Also check the team’s website at https://icoethics.com

It’s a tough job. Not only does the team need to work diligently to find which projects are trying to steal money, they also need to carefully not accuse without evidence. Its a very fine line that they have successfully handled with absolute precision, but not everyone agrees with their process.

The team’s Medium account was suspended due to “bullying”, and its clear to see how their work can be taken like that. The scammers no doubt reached out continously to Medium Staff to get the team removed. Maybe we as a community can work to get them back online, or find another channel they can use with the high amount of visibility and user friendliness that Medium has. We similarly have had to make the hard decision and not share the scams we find, for fear of having our account suspended too. If you have any solutions, let us know in the responses.

Read why we do what we do here

TalkBitcoinTalk is about building a trusted community of BitcoinTalkers and sharing great ideas and great services. If you have an idea for an article or are looking for help, drop us a line.

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