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Huge Crypto Scams – Will the real Blockchains please standup
In this article, we are going to look at three very different crypto scams that are unfolding right now. The first is the Plustoken scam the second is Reggie Middletons Veritaseum Inc. Middleton is well-known to many of us in the Crypto/blockchain space and has left many commentators shocked. The third is an alleged pump and dump scheme by the Directors behind the comically named Long Blockchain company, formerly the Long Island Ice tea corporation.
A Blockchain is a permanent record. Blockchains should stop fraudulent behaviour so why is it that we seem to constantly be bombarded with new crypto scams?
I have been very sceptical of the price action BTC has seen over the last few months and I dearly hope it is not correlated to what appears to be a major scam orchestrated by Plus token. Allegedly collapsed Chinese Ponzi scheme Plus token, looks to be liquidating part of a reported $3.5 billion cache of stolen/scammed cryptocurrency on exchanges, primarily Huobi and Binance. This is according to venture capitalist Dovey Wan. Wan who is now appealing to the crypto ecosystem to spread awareness of the “critical” matter “before it’s too late”.
On Aug. 14, Dovey Wan, a founding partner of blockchain-based investment company Primitive Ventures brought attention to the ongoing mass sell-offs from the fraudulent Chinese investment scheme, dubbed Plus token. This is extremely worrying and we watch closely to see how this could affect the market over the coming days. Wan is attributing this scam to in part being behind the start of the bull market.
Plus token was created in mid-2018 and promised high yield investment returns at different rebate percentages to its four tiers of membership, yes, a classic Ponzi scheme structure. By early 2019, the project claimed to have over 10 million members.
Wan has posted data on all the wallet addresses. These include Bitcoin, Ether and EOS known to be associated with Plus token and urgently called on exchanges and over-the-counter platforms to blacklist them. If her claims are fact, then urgent action is required. Using a blockchain to track small-time criminal behaviour is not realistic but terrorist or large scale fraud is very doable, this will be interesting to see in action here.
Wan says that Chinese police hunted down a core team members of the scheme two months ago and have revealed that investors were scammed of a huge $3 billion!
I mentioned it briefly in my last Coindesk oped but worth additional attention as it may cause further sells pic.twitter.com/uIjgrzwHET
— Dovey Wan 🗝 🦖 (@DoveyWan) August 14, 2019
Wan has also posted data from the security firm Peckshield. The data reveals the money flow from Plus token’s wallet as of early July, the date the sell-offs are thought to have begun. This story is unfolding right now and we will follow it closely as it has major ramifications for the market.
Enough of these Crypto Scams!
As the world economy tetters on the brink of disaster, it is good to remember that a blockchain is a permanent record and therefore should prevent or at least catch fraudulent behaviour. I firmly believe in the coming years that the use of quality blockchains will change the way we all live for the better including preventing or minimizing our boom and bust cycles. There are good projects that are starting to emerge with much promise. We are a new industry and unfortunately, we will continue to be tarnished by brazen Crypto scams but I see a major shift coming as a business and the general public start to understand what a public blockchain really is and hopefully adopt this technology.
The American authorities are very active right now and are taking down scammers at a fast pace. This week has seen Reggie Middleton in the spotlight. Middleton is a well-known personality in the Crypto space and was respected by many. This looks set to change. The Securities and Exchange Commission (SEC) filed charges against Reginald “Reggie” Middleton and two of the entities he controls, these are Veritaseum Inc. and Veritaseum LLC. Middleton allegedly engaged in a fraudulent scheme to market and sell digital securities called “Veri.” The SEC has accused Middleton of selling the securities to retail investors and manipulating the market. A federal court has entered an emergency freeze to preserve $8 million of the $14.8 million the defendants raised in 2017 and 2018 in an offering of the digital securities. Middleton allegedly misled his investors and touted oversized fake investor demand for his Veri token. Middleton claimed to have a product ready to generate revenue when no such product actually existed. It is also alleged Middleton shifted a large number of the investor’s assets to his personal account. This case is ongoing.
Long Blockchain Company
Lastly, I want to give a very special mention to the clowns behind the Long Blockchain company. One clown in particular. Eric Watson. Apologies to any clowns out there for associating Eric Watson to you. Busting scammers in Crypto has never been something I’ve done with this media as it is depressing and dangerous. The only article I have posted on the topic was called Bollocks Chain or Blockchain
This was well over a year ago. At the time I found it hilarious that the Long Island Ice tea company had changed its name to the Long Blockchain company. Overnight the Nasdaq listed company saw its share price skyrocket 300%. How ice tea had a connection to blockchain still hasn’t been established and no doubt, never will! It appears these clowns broke no laws with this name change just successfully mislead lots of people and pumped their share price. What has just happen though is an FBI investigation into the Directors who now appear to not only thought they were smarter than everyone else with the hilarious pivot from tea to a fake blockchain company but also appear to have run a pump and dump scheme. The name change happened very shortly after Eric Watson acquired a major shareholding in the company. The FBI has found WhatsApp chats with an Eric W that point to a pump and dump and the sales of his shares through another company days later. Eric Watson is your classic corporate scumbag who has escaped conviction through highly paid lawyers and well-planned schemes that operate in grey areas of the law. He is a well-known playboy in his homeland of New Zealand where he dated a string of models, got in a violent fight with Hollywood A-lister Russell Crowe and withdrew multi-millions from his company Hanover finance just before it collapsed. After the collapse with 1000s of Mom and Pop investors losing their life savings, Watson threw his birthday party spending a reported one million dollars on it. Pictures were run in the society pages rubbing salt in the wounds of the people whose lives had in many cases been ruined. That’s Eric Watson, a real scumbag.
90% of ICO’s are Crypto Scams – Don’t fall for it!
We all know that most ICO’s were labelled crypto scams, probably around 90%, but the Long Blockchain story is different. This was a Nasdaq listed company run by the financial elite, with ties to American high society. Watson has always managed to weasel his way out of criminal charges and I dearly hope the FBI get this guy in the ongoing investigation. I know many people who have been badly affected by investments with his companies. A business partner of Watson stated last year that he wanted to see Eric Watson six feet under before he died, more testament to what a dreadful person Watson is. Hopefully, the FBI put him in a cell where he wishes he was six feet under. I will follow these three tragic stories in more detail, especially developments in the alleged pump and dump by Eric W of the Long Blockchain company. I finish this article with a reminder that Blockchains are designed to keep a record of everything. These records cannot be tampered with. This is the real value of a public blockchain. The crap is getting filtered out now and the real people working on real Blockchains will shine. I will do my bit to educate the public on what a Blockchain really is. It is a tough job with so many scams hitting headlines and confusing the general public. With this in mind, it is a great opportunity to use the situation with the Long Blockchain Company and what has really happened there to educate a wide market. Some big names are involved in addition to Watson who is only well known in Australasia. I think this story will really hit the mainstream press when all the details emerge. Yes, his was a bollocks chain, will the real blockchains please stand up.