Report: Favourable Crypto Reviews Often Bought

That favourable review of a favourite cryptocurrency project was likely bought, Reuters is reporting today in an extensive exposé.

“Rating ‘experts’ will grade anything positively, for a price,” write the article’s co-authors, Anna Irrera and Elizabeth Dilts.

The two say the story they uncovered in data and documents were confirmed by over two dozen human sources.

A Ukrainian firm looking to sell its new cryptocurrency, for instance, made a list of 200 cryptocurrency social media influencers it could solicit for an endorsement.

The company then paid $7500 to Christopher Greene, who went on to “rave” about the Ukranian coin to his 500 000 followers on YouTube, stating the project has, “huge market opportunity…(and) potential 1000x returns.”

2018 has been a bad year in crypto with very few exceptions. Most coins are now down 90% from last year’s highs.

A yoga instructor in Calgary who bought the Ukrainian coin at Greene’s behest now says he will hold onto it despite losing much of his original investment. “I strongly believe that the cryptocurrency market will rally in the future,” he told Reuters.

In November of last year, the SEC posted a notice on its website warning, “Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.”

If a project eventually is classed as a security, as many crypto projects likely will be, failing to disclose that an endorsement was bought constitutes a violation of American securities laws.

Until recently, however, many in “the crypto space” believe they are operating in an unregulated sector, and typically don’t care much for the government and/or regulations anyway.

Greene has a disclaimer on his YouTube site acknowledging that he may be paid for an endorsement, but never explicitly told his viewers that he was being paid to review the Ukrainian project.

Would-be crypto investors typically come to rely on a particular influencer for information about the new and technically complex cryptocurrency sector.

Calling it a “cryptocurrency sector” is no misnomer: most projects sold their fundraising cryptographic tokens without an established prototype or established business model or revenue stream, and many others have failed to deliver a “blockchain-based” product that is an undeniable match for real market demand.

The Swiss startup Alethena cooperated with the Reuters story.

Representatives from Alethena told the reuters that they had been repeatedly approached by solicitors claiming to be from the popular ICO ratings site “ICOBench,” solicitors who said they could- and then did -boost Alethena’s ratings on the site.

ICObench, a company with 34 employees based in Moscow, London and across Asia, claims it does not take payments for favourable reviews, but will post “premium” profiles of ICO projects in its newsletter for between 1 and 40 bitcoins.

Other companies, like Australia-based “Spero” is producing “Wall Street-style” research reports for cryptocurrency/token projects at a fee paid either in ethers or partly in the project’s particular token.

Which depends on, “how good the project (is) and how much we like it personally,” said Spero co-founder, Henry Sit.

Spero, too, uses a general disclosure but does not explicitly state that the report it has produced was paid for by the company under review.

Sit also admitted, “Spero members may hold cryptocurrency that are the subject of research and publication.”

Irrera and Dilts also obtained a copy of an email sent to a crypto data company from someone selling premium article space at Forbes.com for $2500.

Forbes told the Reuters reporters that paid articles violate its editorial policy, but did not furnish its guidelines.

Following Reuters inquiries, Forbes recently removed a cryptocurrency post by reporter Harold Spark.

Forbes said they had already terminated Spark for violating the Forbes editorial policy and said the recent post found by Reuters had reappeared “due to a technical glitch.”


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