Pretty sneaky fundraising strategy

[noorman0]

I don't know if this is the right board to discuss this. For Mods, please move to the more appropriate board.

A few days ago, I got a whatsapp voice call from my old friend. Apparently wanted to share the story (loss) that he experienced recently and I helped investigate the cause (although at that time I was still on vacation on Day 5 after the new year and there was no supporting devices in front of me, all based on analysis).

Long story short, my friend was interested in buying new coins listed on only one famous exchange which on average has a rate of increase of 5 to 10% per day. The coin has been listed for two weeks and he has traced the project behind the coin before he decided to buy it with all the assets he had in the exchange. It turned out that the project so far (at that time) had not launched any sales and had a telegram community of less than 500 members. My friend only believes that the community will increase in the near future and so will the prices continue to increase.

Approximately 2 weeks my friend held the coin and just in the new year the state of the exchange changed. Massive sales occurred to drop 200%. Well, I began to try to analyze by asking for his help to find any information in the telegram. More or less a conversation between me(M) and my friend(F) like this (the original is Indonesian):

...
M: What are the results of previous sales, how much% is allocated and the funds obtained?
F: Not announced even before the private sale, the team only informed that tokens were only sold to private investors.
M: Who is it (private investor)? Already distributed to them, or the team?
F: So far not yet, private investors haven't got it either. The remaining tokens will be unlocked slowly for the next 5 years. (M:seriously? what is this f*cking project )
M: Now search for how many large quantities were sent to the exchange address? (it took a few minutes for my friend to find a transaction)
F: around 70 million tokens in 5 transactions. 2 billion total tokens.
M: How are trading activities in the market? Is it smooth, routine or erratic?
F: About every 30 seconds there must be an activity automatically. I'm sure it's a bot.
M: What about the activity before the price drops?
F: Almost the same. But previously had buy and sell orders with more qty
M: OK, this is a pretty sneaky fundraising. All tokens sent to the exchange are token allocations for sales may only be partial. The bot belongs to the project team, of course to drive prices and only listed to one exchange to make it easier to monopolize. I'm pretty sure they won't list with more exchanges before the token allocation for sales is sold out. Private investors they mean is their own, of course the results of the sale will not be published because they get it for free.
...
M:Does this project have an ANN thread on bitcointalk?
F:Not yet, based on the team's plan, it will be published this February.
M:Good, inform me if it's been published.

This is a new strategy for raising funds, but it's enough to make you bankrupt instantly. Without realizing it, you indirectly invest in a new project and get a different token price. Maybe this will begin to be applied to future projects, and in fact this is powerful enough to generate greater funds with the same sales allocation or even reduced, compared to doing IEO or other sales strategies.

I hope we all have to be careful going forward ...

[pakhitheboss]

I don't know if this is the right board to discuss this. For Mods, please move to the more appropriate board.

A few days ago, I got a whatsapp voice call from my old friend. Apparently wanted to share the story (loss) that he experienced recently and I helped investigate the cause (although at that time I was still on vacation on Day 5 after the new year and there was no supporting devices in front of me, all based on analysis).

Long story short, my friend was interested in buying new coins listed on only one famous exchange which on average has a rate of increase of 5 to 10% per day. The coin has been listed for two weeks and he has traced the project behind the coin before he decided to buy it with all the assets he had in the exchange. It turned out that the project so far (at that time) had not launched any sales and had a telegram community of less than 500 members. My friend only believes that the community will increase in the near future and so will the prices continue to increase.

Approximately 2 weeks my friend held the coin and just in the new year the state of the exchange changed. Massive sales occurred to drop 200%. Well, I began to try to analyze by asking for his help to find any information in the telegram. More or less a conversation between me(M) and my friend(F) like this (the original is Indonesian):

...
M: What are the results of previous sales, how much% is allocated and the funds obtained?
F: Not announced even before the private sale, the team only informed that tokens were only sold to private investors.
M: Who is it (private investor)? Already distributed to them, or the team?
F: So far not yet, private investors haven't got it either. The remaining tokens will be unlocked slowly for the next 5 years. (M:seriously? what is this f*cking project )
M: Now search for how many large quantities were sent to the exchange address? (it took a few minutes for my friend to find a transaction)
F: around 70 million tokens in 5 transactions. 2 billion total tokens.
M: How are trading activities in the market? Is it smooth, routine or erratic?
F: About every 30 seconds there must be an activity automatically. I'm sure it's a bot.
M: What about the activity before the price drops?
F: Almost the same. But previously had buy and sell orders with more qty
M: OK, this is a pretty sneaky fundraising. All tokens sent to the exchange are token allocations for sales may only be partial. The bot belongs to the project team, of course to drive prices and only listed to one exchange to make it easier to monopolize. I'm pretty sure they won't list with more exchanges before the token allocation for sales is sold out. Private investors they mean is their own, of course the results of the sale will not be published because they get it for free.
...
M:Does this project have an ANN thread on bitcointalk?
F:Not yet, based on the team's plan, it will be published this February.
M:Good, inform me if it's been published.

This is a new strategy for raising funds, but it's enough to make you bankrupt instantly. Without realizing it, you indirectly invest in a new project and get a different token price. Maybe this will begin to be applied to future projects, and in fact this is powerful enough to generate greater funds with the same sales allocation or even reduced, compared to doing IEO or other sales strategies.

I hope we all have to be careful going forward ...

Can you share any more details about this project and the exchange which is dealing with it. I need to take a look at this project.

This is really scary strategy by the project team. If this becomes regular most investors will be stuck up in that project or suffer loses. If you are correct than this sort of fund raising needs to be highlighted in crypto media.

[Jating]

Your friend was pretty much a victim of pump-and-dump schemes by unscrupulous individual. The problem is that the criminals has setup their elaborate plan and it's hard to detect it at early stage.

I guess your really need to share more information though, specially what coins or token this is, so that we can raise awareness and not victimised more unsuspecting victims in crypto-sphere.

[noorman0]

I've joined their community group and searched for it, I tried to discuss it seems that no admin is currently active.

Currently listed on KuCoin by pairing USDT/ARX
This is the official Medium account of this project (ARX), and ARX Contract address
Token holders: 62 (the first 6 transactions are  sent to the KuCoin contract address)

Errata:
- The total supply is 20 billion (It seems they have big plans to make many people poor).
- They will slowly unlock the remaining 99.6% tokens in the next 4 years (circulation currently around 0.4%, damn it).

[Kupid002]

Your friend was pretty much a victim of pump-and-dump schemes by unscrupulous individual. The problem is that the criminals has setup their elaborate plan and it's hard to detect it at early stage.

I guess your really need to share more information though, specially what coins or token this is, so that we can raise awareness and not victimised more unsuspecting victims in crypto-sphere.

yes if possible include the name of the token so they can have another victim if they do it again. They also need a large funds for listing so surely before leaving the coins they will get much more higher amount  . Also tell the name of that exchange it is listed since you it is popular exchange
Edit its answer above what exchange it is.
The question is why kucoin list them easily without auditing a project?

[pakhitheboss]

I've joined their community group and searched for it, I tried to discuss it seems that no admin is currently active.

Currently listed on KuCoin by pairing USDT/ARX
This is the official Medium account of this project (ARX), and ARX Contract address
Token holders: 62 (the first 6 transactions are  sent to the KuCoin contract address)

Errata:
- The total supply is 20 billion (It seems they have big plans to make many people poor).
- They will slowly unlock the remaining 99.6% tokens in the next 4 years (circulation currently around 0.4%, damn it).

Thanks for sharing the details with the community. It will help us to think twice before investing in such projects. How are they running a telegram channel without any admin. Sounds too fishy.

[Ucy]

I guess this is IEO funding, right? I don't really know how IEO funding works... so I will try to explain what I think happened.

Probably, many real investors, some "whales"(so called private investors?) or a whale  dumped the tokens.
If the dump was caused by many investors, something probably made them dump them at almost thesame time.
If dump was caused by whales or a whale then the team or people connected to the team are the whales.. . This is just a guess. So you need to do a proper investigation before jumping into conclusion

They're probably using the bot to create activities and attract traders/investors. I wouldn't be surprised if the developers are buying the token just to create that activities.

Looks like a deceptive method of raising funds, unless genuine buyers are  aware of this and know what it will result to in the end (a dump).
Besides, people should only invest in projects they have properly researched and sure are viable, solid, sustainable etc.
Your friend was probably hoping on unattainable ponzi-like earning.

[plast555]

Why everyone gets themselves into trouble if your friend's objective is to invest in ICO or IEO that's a different scenario. First of all 99% of the projects won't list their token or allow others to trade their token in DEX before the completion of the sale. As per the post, they listed their token before the crowd sale so it's a clear pump and dump coin.

Your friend's idea is to trade and get easy returns from it there is nothing in the world which gives you easy money at least it requires our research, time or skill. The trading opportunity provided by the top coins is high enough to get good returns if anyone is a good trader. As far as I understand from your post that your friend does this type of trade more frequently.

The golden rule in any assets trading is to stick with highly liquid stocks/token/coin/asset to avoid any liquidity crunch (This is not 100% safe but you could reduce the risk). All we can do is raising awareness about it so that others will not be a victim of such activities. Share the project name, symbol and exchange.

[jacafbiz]

The golden rule in any assets trading is to stick with highly liquid stocks/token/coin/asset to avoid any liquidity crunch /quote]

People often fail to adhere to this rule, this is very important, there is no reason to trade a coin that you can't get in and out at will and most of the tokens in the space have this issue of liquidity. when you see a coin been pumped and you look at the buy side just $10k or less please flee for your life because you might nit have this chance again to exit you bag

[noorman0]

I met him again last night, and he told me in more detail.

Actually he is very active in trading and I think he has more knowledge about analyzing prices than I do. He was only interested in trading with the token after having previously gained experience with a token that was almost similar (listed on only one exchange with a trading bot) and he managed to monopolize with a profit of around $ 1100 in 1.5 months. Unfortunately this time he failed to predict his own benefits.

I guess this is IEO funding, right? I don't really know how IEO funding works. so I will try to explain what I think happened.

Probably, many real investors, some "whales"(so called private investors?) or a whale  dumped the tokens.
If the dump was caused by many investors, something probably made them dump them at almost thesame time.
If dump was caused by whales or a whale then the team or people connected to the team are the whales. This is just a guess. So you need to do a proper investigation before jumping into conclusion
_snip_

Yes, but at first he thought there were no whales who came to play there based on the small community members. After he failed, he realized that he wasn't alone.

I can only conclude that this is a "sales game" by the team seeing the massive sending by the team and very few token holders. But he still believes that it is natural, because Kucion has the features of a price/market limit and such. People of course have set it up.

I don't know, we both have different analyzes with this case.
I only believe in coins that have price changes (at least in 1 year) to be analyzed.

[Rodeo02]

-snip-

Maybe the developer plan to sell it in the market and not from fundraising.

You never said if its from IEO but i guess its not since as you said they have only few community and thats explain it.
Your friends is just a victim of price manipulation since the owner play the price of that token  in exchange and your friends see it and think that they can easily earn with that because of price movement , but he failed to estimates things right thats why he lost.

[Mighty_crypt]

It sounds very fishy to me, its better to stick with what we have in crypto space, not some fundraising tactics that's not even popular at all, it would have been a different story if go for IEO, your friend is obsessed with finding money by unnecessary means