Hundreds Of Crypto Projects Exposed
December 28, 2018 11:04 am
Recent research carried out by the Wall Street Journal published on Dec 27, revealed that hundreds of cryptocurrency offerings exhibited signs of plagiarism, fraudulent activity, and improbable returns.
As a part of the research, the Wall Street Journal downloaded white papers of 3,291 crypto projects that announced an initial coin offering from three websites, ICOBench, Tokendata.io and ICORating.com.
A white paper is an informational document issued by a company that contains data about its position, team biography, and technical specifics of a project, and serves as a marketing tool for prospective investors.
Further, analysis of the documents was conducted, which did not include duplicate and non-English 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 the reported offering dates to determine which document first published any given sentence and excluded those projects from this database.”
According to the analysis, 16 percent, or 513 of the aforementioned white papers exhibited signs of plagiarism, identity theft, and false promises. More than 2,000 white papers out of 3,291 projects contained sentences with tempting phrases such as, “nothing to lose, guaranteed profit, return on investment, highest return, high return, funds profit, no risk, and little risk.”
State and federal regulators in the US have cracked down on several offerings having similar language, issuing cease orders and in some cases filing charges against alleged offenders.
Furthermore, the Wall Street Journal attempted to identify fake team members using reverse image search of photos of people consociated with 343 crypto projects, which did not mention critical data about the team members. Few documents did not have team members listed in the first place, making the journal search for their names from the list managed by the US Census Bureau.
In a study conducted in August, the Wall Street Journal also highlighted cases of price manipulation of cryptocurrency led by organized trading groups through services like Telegram.