Mushrooms in the forest because we keep it clean here.
Alt coins

Cryptocurrency scam yanks the knob with a nutty joke

They didn’t raise much money, but man, what a punchline

After raising a money via an initial coin offering (ICO), an organization called Prodeum Project issued a radical update to its website. What was once home to a technical white paper, a social media presence, and a store of general information about the company was replaced with…well, this tweet captures it succinctly:

To be clear, this ICO did not raise thousands, let alone millions. The true numbers are much less impressive, with wallet activity revealing that the scammers took in about $11 USD of ethereum during their fundraising before deciding to pull the plug.

Prodeum’s premise was that it was raising money to keep track of agricultural produce on the blockchain, whatever that means. The pitch was that their system would enable consumers to look up exactly where their food came from. It’s not exactly the type of technological movement that might sweep devotees to acts of NFL-like fandom, but the scammers conveyed that people were writing “Prodeum” on their chests and sending them in as acts of support.

It would appear they had a little help from Fiverr, a site that famously enables freelancers to sell all kinds of goods and services for exactly $5.

Whether the scammers made off with $11 or $11 million, that money is gone. When bad guys disappear with a bunch of ICO money and get away with it, it’s because this technology is working exactly as designed. Ethereum and other cryptocurrencies of its ilk operate in a decentralized manner, meaning transactions are mostly unidentifiable and completely irreversible. Though you can watch money move from one wallet to another, you can’t easily learn the names of the people involved in the transactions.

Furthermore, these near-anonymous transactions are a one-way street every time. Someone wanting to retroactively cancel their backing of a fraudulent ICO has absolutely no recourse. Prodeum’s assorted social media presences have been wiped and emails to support staff bounce back as undeliverable. After raising enough money for two cups of coffee, Prodeum disappeared.

There you have the tragic comedy cryptocurrency technology: the same features that make it appealing to mainstream organizations also make it appealing to the bad guys.

 You May Also Like

Dylan Love is an editorial consultant, contributing reporter, and fiendishly curious technology enthusiast. He owns no cryptocurrencies.