How often can you rip off a customer base? At least three times, if you are the operators of ArbiTraCoin. At the end of September 2018, the Austrian Financial Market Authority (FMA) issued an investor warning about ArbitraCoin, thus putting an end to the situation for the time being. Our research revealed that many of the cheated ArbitraCoin owners are also hodling worthless XIN tokens. The search for the backers and those responsible is on.
The Austrian Financial Market Authority (FMA) is currently very active and busy with the crypto industry. On 20 September 2018, it issued an investor warning about ArbiTraCoin. Financial Telegram identified this as a potential fraud case back in July. The FMA says: ArbiTracoin is not entitled to conduct banking transactions requiring a license in Austria. The provider is not permitted to accept third-party funds commercially for administration or as a deposit (§ 1 para 1 no. 1 BWG).
Not really surprising, since even though the website www.arbitracoin.com, which went offline in August (Fintelegram reported), has been put back on with some minor changes, nothing is happening with this coin. According to statements from various distributors, the translation of the website and the wallets (?) are still being worked on in order to address the Russian and US market (can only be a joke!) accordingly. The telegram and Twitter channels of the crypto project have been a communicative desert for months now. The value of ArbiTraCoin is accordingly low or no longer existent:
The ArbiTraCoin is interesting in so far as it is only the last glossy product (as far as we know!) from a crypto MLM system existing since 2015. The following is a brief outline of the history of this long-standing rip-off system.
2015 – Spring 2017: the MyCryptoWorld project
It all started with the MyCryptoWorld project.
The then domains of this project were mycryptoworld.com and mycryptoworld.net (both registered on September 15, 2015) and www.mycryptocoins20.com (registered on November 26, 2016). Meanwhile, none of these websites is accessible anymore.
It is now difficult to identify the people who were responsible for the network’s ideas at the time, and many of the advertising contributions have since been deleted. Identifiable is the American Thomas Prendergast, an obvious marketing professional who actively marketed MyCryptoCoin in 2016. In the meantime, most MyCryptoCoin contributions have been removed from his website and he is dedicating himself to his new project: Markethive should become the new Facebook! The site Behindmlm.com, which always tries to clarify the situation, stated in an early contribution (Dec. 2016) that MyCryptoWorld is probably a German-US project since according to Alexa the website traffic would come mainly from the USA (37%) and from Germany (32%). The German participation can also be recognized by a German IP address of the domain www.mycryptocoins20.com.
In any case, the project operators were already selling token packages from autumn 2015 (EUR, USD and BTC were accepted as means of payment), whereby the 1 billion MyCryptoCoins sold (tokens of a decentralized and unguided DAO etc.) were not to be issued until January 2017. At the same time, there was a sophisticated commission system for the brokerage of further token buyers; the commissions were not paid out in MyCryptoCoins (MCC) but in Bitcoins. This MyCryptoCoin project was probably one of the first crypto-MLM-ICOs worldwide with a SAFT-like design. Again, who should say that the MLM artists are not the creative avantgarde.
Spring 2017: MCC becomes the XIN TOKEN
In January 2017, 9 billion XIN tokens were issued on the Infinity Economics (IE) blockchain; these tokens were distributed to the members of the Crypto MLM system of MyCryptoWorld. The MCC token was no longer mentioned. The Infinity Economics (IE) platform, according to advertising statements, was a completely decentralized, unguided DAO* and completely distributed financial platform, which stands in the OWNERSHIP OF PEOPLE WHICH USE IT. According to some statements on Bitcointalk, IE saw itself as a service provider with a “software platform” on a blockchain basis.
The IE platform was promoted at the beginning of 2017 as the “Swiss knife” among the cryptocurrencies: the IE platform as supposed to create an alternative crypto market access for consumers such as traders, investors, and financial institutions worldwide by creating and offering complete everyday services including a payment system. The extensive additional features (e.g. Smart Contracts, Assets, Digital Goods Store, Distributed Hosting, Rating Agency or Digital Notary) make the platform comparable with an operating system that provides all the tools without appearing overloaded. IE is the world’s most advanced and comprehensive crypto platform of its kind.
In total, the IE is said to have proud 30,000 participants around, with 40,000 XIN wallets and 9 billion issued XIN tokens. In addition to the XIN tokens, the founding members of the IE-DAO also received shares (?) on the IE platform, which could also be traded on the IE platform and entitle the shareholders to a share of the IE platform’s fee income. A little understandable and certainly not at all transparent construct.
The Infinity Economics Forum for the exchange of information and experience (now rather lukewarm) went online in February 2017. The Infinity Economics Coin Exchange website has been online since July 2017. According to various statements, all significant development activities at the blockchain were discontinued as early as spring 2017 – shortly after the token was issued. Only XIN are traded on the Infinity Economics Coin Exchange – with a considerable trading volume. Otherwise, the community managed to get a listing on questionable exchanges such as coingather.com (offline since Nov. 2017) and vobit.net. Coins are also listed on www.coinmarketcap.com, but no market capitalization is currently quoted. The trading volume of the last 24 hours (October 15, 2018, 16.45h), on the other hand, was considerable with more than $36 million, whereby rumor is that this is mainly fake turnover (wash trading). The value of the tokens has dropped massively in recent months and amount to USD 0.00383 as of yesterday.
February 2017: WeGoCrypto shows up
Starting in February 2017, the distribution of a new project was started within the MyCryptoWorld MLM structure with 30,000 members under the project name We Go Crypto. We Go Crypto was introduced as an automatic “get rich in your sleep” arbitrage trading software. Again, a disproportionate bonus system for recruited participants was implemented.
On the website www.wgc-worldwide.com you can find Dennis Novak, Jörg Gehrmann, Daan v. Koelen and Rudi Neidhardt behind the heads of the We Go Crypto MLM system. The website has an IP address in Germany, but according to Domain bigdata, the registrar is located offshore in Panama. The predecessor site www.wgc-network.com also had an IP address in Munich, Bavaria. Novak, Gehrmann, Neidhardt are all well known (and notorious) in MLM circles.
The extent to which this distribution of software packages has worked is not known. In any case, the x-invest forum has warned against this project: the program has been moved to “closed programs” because it has stopped its activity and is either offline, no longer pays out at all or only partially/selectively pays out.
After the SMART ARBITRAGE SOFTWARE product had been more or less successfully sold to the approx. 30,000 investors in 2017, the distributors of the MLM system ignited the last stage of the rip-off rocket and released the ArbitraCoin.
April 2018: ArbiTracoin enters the market
With ArbiTraCoin the MLM distributors wanted to profit from the ICO hype of the first months in spring 2018. Obviously, there were a few real web marketing professionals, because the ArbiTracoin is a glossy project: the website is shimmering.
Also with this token, it is possible to get a listing at www.coinmarketcap.com. According to Coinmarketcap 131.901.470 Tokens were sold in the Token Sale. Apart from a lot of high gloss and empty promises, nothing happens with this coin. A coin is now available for USD 0.001317 (starting price was USD 0.3413). However, no market capitalization is currently quoted and the trading volume is virtually non-existent. In our opinion, the ArbitraCoin is an exit scam, i.e. a pure rip-off.
Interestingly enough, the last ArbiTraCoin project, in particular, was probably a German project and German investors, in particular, were ripped off.
But how do all these crypto MLM’s come together? See here proof no 1 for a connection: The Facebook account infinityeconomics1 (operator of XIN) has named the facebook page We Go Crypto and renamed it internally to ArbitraCoin. Fintelegram is currently looking into further into evidence.
The probability is quite high that many investors in the Infinity Economics MLM system are now left behind on worthless XINs, as well as on worthless SMART ARBITRAGE software packages and/or ArbitraCoinTokens.
At the FMA Conference on October 4, 2018, Mr. Kumpfmüller, CEO of the FMA, reported that every second criminal complaint filed by the FMA with the Public Prosecutor’s Office now revolves around the crypto money industry. Well, we can imagine that very well.
After thought: We would be grateful for any more detailed information regarding the above systems and people involved.
Update: We received a whistleblower message about an actual ICO done by these people. Pls stay away from the Smart Trade Coin ICO: We did an ICO Scam Alert.