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Author Topic: The ICO/Pre-sale/Crowd-sale/Crowd-funding "Marketing Scam"  (Read 3683 times)
fartbags
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February 21, 2015, 09:03:22 PM
 #1




The ICO/Pre-sale/Crowd-sale/Crowd-funding "Marketing Scam"



I recently became aware of an interesting trade secret on how to run a successful ICO. After creating a small crypto magazine with 5,000 active users/followers, I was contact by a company called https://koinify.com to promote an ICO. This offer included a payment of 5 BTC worth of a token called GEMs https://koinify.com/#/project/GEMZ . I turned down their offer as I felt this was form of scamming investors into purchasing GEMs. Over the coming weeks I started noticing gems being talked about on cryptonews youtube channels and blogs. I have researched koinify and never do I see a mention of this activity.

I wonder how Koinify was able to hide these gem giveaways for marketing purposes. Did Koinify buy their own gems and take back BTC as well? Did a big investor buy additional gems without receiving them? Did they hide this in the development budget?

Koinify has no transparency with how raised funds are being used. No one knows what they are doing with the gem funds any more.

Would you invest in an ICO if you knew the people talking about it were receiving 5 BTC+ payments to talk about it? Is this why many ICOs immediately drop in value once they are available for exchange?




I find this way of marketing of an ICO to be fully acceptable if it is transparent. Hiding these free coins is a scam. I would like Koinify to be openly transparent about what % of coins will be given out to market their ICOs. Investors should be aware of this before purchasing an ICO.




P.S. Sorry to pick only on Koinify. I'm sure many ICOs have been doing this scam. Koinify has the FACTOM ICO coming out in March which looks amazing. Koinify does a lot of good work. My only problem with them is this secret marketing scam to attract investors.






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AltcoinInvestor
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February 21, 2015, 09:06:26 PM
 #2

99% of all ico/ipo etc are already scam.
I think Smart people don't invest those shit.
readysalted89
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February 21, 2015, 10:09:13 PM
 #3

I thought this type of thing might be going on. Your story is the first direct evidence I have read that confirms it. After scam IPOs I would have expected any decent website that recommended the IPO to condemn the devs. Instead I found they stayed quiet about it, probably because they were paid to recommend the scam IPO.
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February 21, 2015, 10:31:03 PM
 #4

GetGems is an awesome project that actually makes sense. Actually Koinify makes sure scams don't happen, they do due diligence, meet the devs and only accept legit projects. Also the funds are stored in multisig and devs get paid on a milestone basis in a transparent way. Actually i would recommend for users to only invest in Koinify projects.

OP doesn't know what hes talking about. Koinify brings crowdfunding to a proffessional and transparent level or else i wouldn't have invested in their projects.

Also there are plenty of scams which aren't ico, miners are getting butthurt some dope projects aren't pow which they cant throw their botnet at.
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February 21, 2015, 10:54:38 PM
 #5

Honestly, I thought the OP was gonna give us an actual scam. But OP, this is how marketing works like in the real world. Companies pay marketing individuals or firms, help market their product. What koinify is doing is not wrong, nor is it a scam.

You sound like you are totally clueless with how marketing works...Pretty stupid thread.

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# Free market


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February 21, 2015, 10:58:09 PM
 #6

Now the things are changed, the ico/ipo/iso "era" is passed. In these years it has been a lot of scam, and I personally don't trust an altcoin ico anymore (that's insane).
BitcoiNaked
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February 21, 2015, 11:39:07 PM
 #7

Koinify is legit, scammers are mad there is a platform attracting proper projects, and yeah proper projects deserve proper marketing.
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February 22, 2015, 12:12:59 AM
 #8

Koinify is legit, scammers are mad there is a platform attracting proper projects, and yeah proper projects deserve proper marketing.

Every IPO/ICO says this. They are all extremely high risk.

BTC - 14kYyhhWZwSJFHAjNTtyhRVSu157nE92gF
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February 22, 2015, 07:04:53 AM
 #9

i guess if you have an endless supply of worthless coins you can give out as many as you like to market actual sales of the worthless coins.
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# Free market


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February 22, 2015, 09:14:11 AM
 #10

Everyone should pay attention, the rule is always the same "invest only that you are afford to lose". If someone want to invest it his choice, but at the end he *must not* cry if he will lose everything.
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February 24, 2015, 08:42:40 PM
 #11


I'm pushing for more transparency in the ICO/Pre-sale/crowdsale process.


I see two ways of marketing an ICO that would be less of a scam

1) I have no issues with ICOs using coins/tokens to market as long as it's publicly known. I would like to know exactly how many coins are going to be used during the marketing of the ICO. If you have no other funds, then this is your only option for marketing.

2) If you want to market your ICO and you have cash, then pay off people with cash. Do not make coins worthless by giving them away.

3) Create an idea that people want to talk about. I would like to think Ethereum went this route but who knows. I guess this option doesn't work very well when media is busy putting together articles & videos for ICOs that offer them free coins.


This marketing of ICOs is becoming big business. I'm sure sooner or later new groups will come out and be more transparent. One of the reasons I released this "secret sauce" to everyone was to allow more competition to grow and join the party.






On a side note:
I would like to see an ICO with full transparency of how all collected BTC is being used. I would like ICO spending records to be public. This would help minimize ICO managers from buying their own coins and taking back the BTC. Even more important than preventing scams, I believe this would help the whole system as users can intervene with advice where they believe ICO funds are not being used in the best way.





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February 25, 2015, 01:15:30 AM
 #12

For those who didn't figure it out yet, there's no such thing as "fair distribution" via ICO, it's smoke and mirrors. The end result is exactly like Ripple - ie you're investing in something with unknown dilution.

All ICOs without burn are inherently scammy, because issuer can self-buy up to unlimited amount. To illustrate:

1. New PoS coin is announced.
2. Coins are distributed according to BTC deposited to ICO address up to certain date (or asset purchases, or whatever)
3. Others buy 100BTC worth of shares
4. Issuer buys 900BTC worth of shares and gets his 900BTC back immediately. Can even repeat the cycle many times during ICO, if the deposit address is not guaranteed to be frozen.
5. Issuer now owns 90% of issue at zero cost

This is why only proof of burn distribution can be trusted (ie XCP did things right, NXT or master? not exactly.)
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February 25, 2015, 01:53:32 AM
 #13

99% of all ico/ipo etc are already scam.
I think Smart people don't invest those shit.

yup.  I'll repeat it so everyone understands.  IN A LAND BEFORE TIME, THERE WAS PRE-MINE.  THEN GOD CAME OUT AND SAID - NO MORE PREMINE - ITS A SCAM.  Greedy devs then Instamined their coins with scammy block rewards !  So GOD came down with thunder and said NO MORE !  but the greedy devs who felt their worthless work needed to be highly paid simply premined and offered it to the public - the ICO was born.  it is a plague which has infected many.  many have died.  many more will die.

                                 
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February 25, 2015, 02:27:13 AM
 #14

Must read topic for all newbie account.
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April 04, 2015, 04:55:56 PM
 #15

The biggest scam in ICOs is the devs buy all their coins for free (maybe a small fee for the escrow service). Its just a sneaky way for devs to premine all their coins and make it looks like "investors" bought those coins. When it comes down to it, almost all crypto scams come down to the premine scam.

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April 04, 2015, 04:59:58 PM
 #16

The biggest scam in ICOs is the devs buy all their coins for free (maybe a small fee for the escrow service). Its just a sneaky way for devs to premine all their coins and make it looks like "investors" bought those coins. When it comes down to it, almost all crypto scams come down to the premine scam.
elementary watson


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ðºÞæ
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April 04, 2015, 05:08:02 PM
 #17

For those who didn't figure it out yet, there's no such thing as "fair distribution" via ICO, it's smoke and mirrors. The end result is exactly like Ripple - ie you're investing in something with unknown dilution.

All ICOs without burn are inherently scammy, because issuer can self-buy up to unlimited amount. To illustrate:

1. New PoS coin is announced.
2. Coins are distributed according to BTC deposited to ICO address up to certain date (or asset purchases, or whatever)
3. Others buy 100BTC worth of shares
4. Issuer buys 900BTC worth of shares and gets his 900BTC back immediately. Can even repeat the cycle many times during ICO, if the deposit address is not guaranteed to be frozen.
5. Issuer now owns 90% of issue at zero cost

This is why only proof of burn distribution can be trusted (ie XCP did things right, NXT or master? not exactly.)
fishing for suckers to part with there money

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April 04, 2015, 05:33:05 PM
 #18

Now the things are changed, the ico/ipo/iso "era" is passed. In these years it has been a lot of scam, and I personally don't trust an altcoin ico anymore (that's insane).

Good thread!

It is too bad scams have to ruin everything. While I do think there are worthwhile projects out there; its too risky to invest.

Even worthwhile projects often go nowhere. Look at the money Ethereum brought in via ICO. What have they produced?

ICO is free money. Why bust your ass if you managed to pull in hundreds of thousands of dollars with little or no effort? Millions of dollars in Ethereum's case.

People got to quit throwing their money away on "the next big thing".

The cryptocurrency bubble has passed. Invest in established and proven projects and hope for better days.

" If you have to spam and shout to justify your existence then you are a shit coin."  TaunSew
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April 05, 2015, 04:30:35 PM
 #19

Most volume on ICO is self sale

compmaster
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May 15, 2015, 07:57:12 PM
 #20

Most volume on ICO is self sale

This is the most important thing for me as well. I want to know if there was a self sale!!!!

I bought some factom on the first day. Is there anyway to see all of the BTC addresses that sent money to factom? I don't really care if a company uses this marketing tactic to raise funds but if they do, I want to know how much factom was given away for free to advertise the ICO. After watching GEMZ play out, I doubt koinify is going to give any transparency on factom funds.

https://bitcointalk.org/index.php?topic=850070.msg11386776#msg11386776

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