2018 will probably go down as the year of unfortunate events in crypto history, considering the bloodbath in crypto charts and of course Wall Street’s decision to pack up and leave the whole crypto scene. Things just aren’t looking up for the cryptoverse. And to make the matters even worse, a recent research unveiled the dark truths about several cryptocurrency offerings.
According to Wall Street Journal’s (WSJ) recent research, which was published on the 27th of December, hundreds of cryptocurrency offerings display signs of fraudulent activities, dubious returns and even plagiarism. Way to mark the end of the year huh?
For the purpose of the research, the WSJ downloaded and scrutinized whitepapers of 3,291 cryptocurrency projects, each of which had announced heir initial coin offerings (ICO) from three different websites, ICOBench.com, Tokendata.io and ICORating.com.
Whitepapers have become rather common and popular as they seemingly provide authenticity to any crypto project. Being an informational document, it goes on to describe the company’s position, its beliefs, and its team members, along with the project’s technical specifications; all for the purpose of attracting potential investors.
So the reporters conducted a detailed analysis of the documents, in which they excluded the duplicate and foreign papers.
To identify duplicate language, the Journal compared sentences with at least 10 unique words to every other sentence in other white papers. Reporters then read and reviewed nearly 10,000 sentences appearing more than once among the 3,291 papers analyzed and removed technical and legal sounding language. Then, the Journal compared reported offering dates to determine which document first published any given sentence and excluded those projects from this database.
And as per the reports, the analysis indicated that 16 per cent, which is the equivalent of 513 whitepapers, displayed signs of plagiarism, identity theft and hollow promises of doubtful returns. Furthermore of the 3,291 whitepapers, 2000 of them contained luring sentences such as, “nothing to lose, guaranteed profit, return on investment, highest return, high return, funds profit, no risk and little risk.” That is a really high number of dubious projects, enough to tarnish the image of the crypto market.
Cryptos and authorities haven’t really seen eye to eye since the beginning but apparently the authorities had legitimate grounds to back their mistrust. This isn’t the first time that crypto projects are being dissected and scrutinized, state and federal regulators in the United States have previously cracked down several offerings with similar luring language. They even went as far as issuing cease and desist orders and even filing charges against the alleged offenders.
In its endeavor to uncover the fraudulent projects, the team of WSJ even tried to identity the so-called team members of the projects by reverse image search of photos of people associated with 343 crypto projects, which did not cite key data about team members. There were certain documents that didn’t even list the members, so the Journal searched for names appearing in a list of over one million managed by the U.S. Census Bureau.
With everything that is going on in the crypto community, I’m pretty sure they are the most eager to say “Thankyou Next” to 2018.