It sickens me to increasingly see the sad state of ICO’s and fundraising within the community. While Bitcoin and decentralized currencies have bought along with it the power to remit across borders and garner the power to invest and buy into emerging projects that may seem interesting, it has also enabled sick minds to loot off the innocent with little to no consequences. While I align with the freemarket’s principal’s that investments should be made open to anyone and those who do not conduct their due research would eventually lose out, I am not in sync with the sheer amount of scams that have happened in the recent past. This post of mine is a follow up post to a previous thread where I explained why ICO’s have become a get rich quick scheme for a select few.
Today, I’ll be talking of how the people behind ICO’s reach their goals.
Step 1 : Buy lots of shill accounts.
Before an ICO occurs, people often buy ten to thirty aged accounts within the forum. If you observe our marketplace, this is a market in itself. I know of individuals that have payed upto 500 USD for 20 aged accounts. The pricing may vary anywhere between 5 to 100 depending on the age of the account, quality of the post and the trust it holds. These shill accounts are often hacked and/or created by a single individual for the purpose of selling. Shilling lies at the heart of most ICO’s as they are used to manipulate investor sentiments. Additionally, they are used to argue against individuals that speak out against ICO’s. Consider a situation where an individual explains that the business model makes no sense. The founders of the ICO go behind shill accounts and talk in order to manipulate the markets and convince investors that the state of things are different.
Step 2: Warm the shill accounts.
Since it has become normal for people to look up the accounts that post a lot in certain ICO’s, scammers warm these accounts with the intent of making them look legitimate. They begin making random posts in random pages to fill the first “posts” page of the shill. The psychology behind this is that most individuals often look only at page 1 of the shill’s posts and make their decisions. When they see frequent posts in other pages they believe this might be a legitimate account. As a matter of fact, ICO’s are often held by individuals that have been here for years and know a fair amount about other projects. So they do not find it difficult to go behind a shill account and begin posting things that might not be considered spam.
Step 3: Buy 4 major hero accounts.
These accounts are usually used as the “founders” of the project and portrayed to be the leads. These accounts are fronted as marketing, business, developer and so on to make it look like there is a real time in place. In some cases a single person plays all these persona in their room. This is sickening because most investors think they have an actual team they are investing into but in most cases these are fake id’s and/or non existent people. Often, you will notice these fake accounts make elaborate posts about the industry and hype the thread. What’s funny about these persona’s would be the fact that you will almost never see a common link or previous projects the team has worked on prior to the ICO
Step 4 : Graphics and fancy threads.
This is where the scammer basically hires a GFX specialist and pays him 100 dollars to make a really fancy thread. He will also set up really manipulative terms that will make you invest more than what is probably within your budget. For instance — higher profit margins or dividends for buying x amount of Bitcoin. Keep in mind, this is entirely a psychological game. While some of the larger ICO”s that run in the million dollar range have on-board GFX specialists to keep releasing new infographics, most of these scammers do a one time payment of a couple hundred dollars and get done with graphics. Keep in mind, these guys are not looking to set a new record for fund raising. They are looking to raise around 100–500,000 dollars and then get done with it. In a lot of cases they wish to be large enough to make it worth their efforts but small enough to not attract attention.
Step 4 : End of ICO
This is where majority of the investments come in place. With a prototype in place and the shilling accounts going wild most people send in money as they believe they are now closer to an ICO. Most ICO’s see about 60–70 percent of the funds come around the end of the ICO. This is driven by 2 things
Fear of Missing out or FOMO as some call it. Investors think its a good idea to buy in towards the end of the ICO to either hold or sell as the prices go as the coins get listed in public markets. Most scammer coins list themselves in select markets to help them manipulate markets (more on this later)
A good amount of the ICO amount is bitcoin that the devs send in to make the ICO look legit. For instance, if an ICO already has about 60 BTC in “investments” — then odds are high it will manage to raise another 100–200 Bitcoin. A good way to see if this occurs is to verify if all of the investment funds go to a single verifiable account. A good number of ICO’s here have multiple investment BTC wallet account — you are free to make your conclusion. Also keep in mind, the dev is able to manipulate the markets with this “investment” of his. If this ICO managed to raise 240 Btc — then 25 percent of the coins + whatever dev fund exists goes into the pockets of the dev. This is an ample amount to manipulate the markets
Step 5 : Dreams and Marketlisting
This is where the Dev would bring in massive hype and begin listing the coin on 1 or 2 exchanges tops. In some cases he would have bots placing hundreds of orders in the order books and cancelling them or buying and selling into his own orders to fake the volume of the coin. Again, this fudging is done in order to show there is actual demand for the coin. He uses manipulation of the books to bring the prices to the highest possible price and then liquidates the coins he holds in the process. During this period he acquires as many Bitcoins as he possibly could within a short period of time. Ideally, he also takes a tiny break to recover from all the work done during the ICO — then returns to the hype cycle.
Step 6: Crash, burn and repeat.
During the crash phase the shills go silent, the dev dissapears and all of a sudden the dev realizes he has a real life to maintain too. A number of excuses and delays pop up leading to the community losing faith in the coin. Massive dumps begin happening and the price of the coin falls crazily. Investors that bought in with hopes of doubling their cash often sell at a loss. All this, while the Dev stands back and watches the show. Keep in mind he is well stacked with Bitcoin at this point of time. He holds back news and ensures there is no hype with the shills going silent. As the market crashes he will buy back the coins and hold them in multiple wallets. Once this happens he will return explaining where was all the while and have the shills change investor sentiment to positive.
There you go guys — 6 steps to making 100,000 USD a month.
Think this is a joke ? I’ll be breaking down each one of these steps mentioned and correlating them with ICO’s in my next post. I know this might seem like a “noob” post to many on here but sadly — this is not for people who think so. This post was made for the sake of the enthusiast who read of Bitcoin somewhere and began digging up on it and stumbled on the forum, for that student who’s put in his tution money thinking he will make some profit and live a life of comfort for a while, for the dad who’s spent more than he can afford to lose in the ICO’s here.
My next post will correlate existing ICO’s with the steps mentioned here.
Have an ICO you wish to have investigated ? Post here with links to them.
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