I've been doing a lot of research lately into scams involving cryptos. A particularly organized and insidious scam is the fake ICO. What I would most like to do is come up with a reasonable set of criteria to follow in order to help investors avoid wasting any coins in these scams.
So, rather than do months of research into the subject, all the while with investors continually getting taken by these hucksters, I will just start sharing what I am discovering as I go, through a multi-part series of posts. Maybe together we can identify a few scams on the fly before they do more damage.
Here in Part 1, I'm going to talk about what led me to the scam-du-jour - the Oren Platform.
I found Oren not by looking for a scam to research, but rather by doing bounties.
What's a bounty you may ask?
When a developer decides to do an ICO, they typically do a bounty campaign as their freelance marketing group. They set aside some portion of their coins for bounty participants who promote the project through Twitter, Facebook, signature campaigns in forums, blog posts, Reddit, video posts, and other marketing forms. They will also ask for assistance with translations and proofreading of documents such as whitepapers, announcement threads in forums, websites, etc. It's sort of crowdsourcing short-term work.
Bounty participants (or bounty hunters, as I'm sure they would like to be called) are generally paid in the coin or token being promoted, but also sometimes in something more popular like BTC or ETH.
I am new to bounties and I'm finding them a lot of fun. It's an interesting way to see what's going on in the cryptosphere and earn a few coins in the process.
Now, I don't remember where I first saw the reference to Oren as a scam, but it was just within a day or two of recognizing it listed on a new site for bounty hunters called Bountylord.
I followed the link from there back to the BitcoinTalk Forum bounty campaign thread. I read up on the Oren project.
It was supposed to be a blockchain-based platform that would bring together gamers, game designers, and game publishers. I still didn't really know what it was, but it sounded great.
Then I looked to the end of the thread where the scammy nature of the project was just becoming apparent to the bounty participants.
What I would like to focus on here are the red flags that were probably beginning to appear in the bounty campaign thread that might have tipped off the scam as it was developing.
As I look at the spreadsheets of the campaign participants, I see lots of problems.
Of the 352 Twitter participants, the spreadsheet only lists 32 of those people as having complied with the rules of the campaign. 9%. That's an absurdly low number. And the results are similar for other aspects of the campaign. Only 40 of 234 Facebook participants (17%) and only 21 of 58 (36%) for the signature campaign. All the others had some disqualifying remark.
Really? Only 9% of the Twitter participants followed the rules?
Sure, there are always a few people that have a problem signing up, miss submitting a piece of information, don't follow a rule, make a mistake, or are just plain trying to get some free coins. But most bounty hunters participate in campaigns like this regularly. It's not rocket science. Following the rules is pretty easy.
And fixing small problems between participants and campaign managers happens regularly.
The usual operating procedure during a bounty campaign is for the participants to sign up via a form or a post in the bounty campaign thread and then simply begin doing the tasks they've signed up for. Generally, there isn't really an acceptance process. It is up to the participants to check the spreadsheet from time to time to see that they are on it and are being given credit for their tasks. If not, it's up to them to contact the campaign manager one way or another.
But, it's also normal that 90% of the participants are being given at least most of the credit they are due, or at least aren't being completely denied payment at all.
Looking at other bounty campaigns, the numbers are about opposite what Oren had. For example, in another small campaign, 84 of 89 Twitter and Facebook marketers were in good standing. Only 5 had a problem. In the same campaign, 29 of 30 signature campaign participants were clear.
And in another, larger campaign? 1106 of 1119 Twitter marketers were fine. 98.8%. 808 of 820 Facebook marketers were acceptable. Even in the signature campaign, which was more strict, 122 of 163 were accepted. That's 75%.
Why were the numbers in the Oren campaign so low?
Simple - they were looking for any excuse to not pay them.
For example, one of the requirements to join the campaign was to sign up for the Telegram account. The only problem with this was that numerous people stated in the campaign thread that there were problems with the Telegram link. It wasn't working. When they posted this to the campaign manager the answer was - "we will accept you to join our campaigns without joining our Telegram group."
That should have been the end of it, but the spreadsheet lists 'not joining the Telegram group' as the reason for them being denied all payment.
And this theme continues with other problems that should have been easily resolved or not even significant.
There are always problems with sign-ups and reporting, but campaign managers are generally more accommodating and understanding.
This one seems to have had his hands tied, or at least that's how it was made to appear. Without more evidence, I have to assume the bounty campaign manager was a victim of this scam as well. He also claimed to have not been paid.
In any case, the vast majority of the participants weren't going to be paid, even though they were still promoting Oren!
At least some of the participants were looking at the spreadsheet, because they began complaining. The bounty thread was rather contentious toward the end. That should have been a bad sign of what was happening.
So, what was the upshot of all this?
It seems that the ICO team had managed to get at least some funds from over-eager investors, with the bounty team doing the work for them.
According to this Steemit post the organizers managed to get away with 175 Ethereum in exchange for the now worthless Oren tokens, if they ever distributed them at all. At Ethereum's current price, that's about $53000.
And the marketers were paid nothing for their work.
Who do those investors and bounty campaign participants complain to?
As this was unfolding, it became clear that the Oren team had disappeared. Their website went dead, and Twitter, Facebook, YouTube, and Telegram accounts all closed or deleted, as of October 9th, 2017 when I discovered all this.
I wonder if we could have had some more clues as to the risk on this one. Were the members of the ICO team responsive? Were they active on social media? Does anybody know who they are?
I would like to catch a scam as it is happening to see what the red flags are.
I'll look at this phenomena from a different perspective next time. Unfortunately, I'm sure that I will find another scam like this one.
@eileenbeach has voted on behalf of @minnowpond. If you would like to recieve upvotes from minnowponds team on all your posts, simply FOLLOW @minnowpond.
To receive an upvote send 0.25 SBD to @minnowpond with your posts url as the memo To receive an reSteem send 0.75 SBD to @minnowpond with your posts url as the memo To receive an upvote and a reSteem send 1.00SBD to @minnowpond with your posts url as the memoThank you for write up. I was going to say "fantastic" but that news is not.
Thanks for "outing" them.
I hope you continue with this research, you seem good at it!.
Perhaps a daily/weekly post with updates / points of note etc as well as the in-depth reports.
Thanks again
Thanks for your encouraging words. It seems like those who get swindled are content to just learn the lesson and move on, but I feel like I shouldn't just let it go. I think the industry needs to confront this more directly, so I'll do some small part. Thanks!
I love what you are doing with this. I've been working on a similar project and would love to help anyway I can.
Thanks, I hope we can make some kind of difference!
Congratulations @cryptospooge! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPThis is a great article! Thank you for contributing to the safety of the community. We need to make people aware as soon as we see red flags. Hurts to see that so many are abusing the cryptospace for their scams.
It's still such a new industry that we're all still learning. But I get worried about the new people who get involved and get too easily sucked into scams. Education is the key here for all of us!
[ Electroneum ]
(not a scam persay, but horrific marketing)
Congratulations @cryptospooge! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
Click on any badge to view your own Board of Honor on SteemitBoard.
For more information about SteemitBoard, click here
If you no longer want to receive notifications, reply to this comment with the word
STOPGood info, thanks for sharing !