Cochin Herald

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When cryptocurrency issuers want positive coverage for their virtual coins,
they buy it.

Self-proclaimed social media personalities charge thousands of dollars for video reviews. Research houses accept payments in the cryptocurrencies they are analyzing. Rating “experts” will grade anything positively, for a price.

All this is common, according to more than two dozen people in the cryptocurrency market and documents reviewed by Reuters.

Earlier this year, Ukrainian start-up Hacken was looking to promote its new coin after raising $3 million online in late 2017. Chief Executive Dmytro Budorin and his team identified a list of almost 200 cryptocurrency social media personalities they thought could help them, he said.

Hacken paid $7,500 for Christopher Greene, host of Alternative Media Television – a YouTube channel with more than 500,000 subscribers – to review its coin in a video, Budorin told Reuters. In the 25-minute video, published on June 22, Greene raved about Hacken’s coin and business, describing it as a “huge market opportunity” with “potential 1,000x returns.”

Nowhere in the video – which has more than 92,000 views – is Hacken’s payment to Greene mentioned. Greene, who used to work for wealth management firm Merrill Lynch, directs viewers in the first minute of the video to a disclaimer on his website that states he “may receive compensation for products and services” that he recommends. There is no specific mention of Hacken, or any specific cryptocurrency issuers, paying him.

Greene did not respond to emails and phone messages from Reuters asking about his work for Hacken.

Four days after the YouTube review was published, Greene turned to Twitter to brag that Hacken’s coin was up 14 percent on the day to $1.54 per coin.

Some people paid attention. Carter Zurawel, a yoga instructor in Calgary, Canada, replied to Greene’s tweet: “That Hacken video was great man! Made me buy a couple hundred.”

The token’s price has since fallen by more than 75 percent to 36 cents. Zurawel told Reuters in Twitter messages that he lost much of his initial investment, worth several hundred dollars. He said he was not aware that Greene was paid for his Hacken video, but he shrugged off the poor performance of the currency. “I will probably hold onto it because I strongly believe that the cryptocurrency market will rally in the future,” he told Reuters.

Budorin told Reuters he recognized that the company’s payment to Greene and other YouTube reviewers were “unethical.” Video reviews “should be either done with (a) sponsored tag or only for projects that (the) reviewer personally supports,” he said.

Hacken’s approach exemplifies a pay-for-play hype machine that churns out recommendations viewed by hundreds of thousands of hungry investors. Few researchers or experts disclose their own holdings of the digital assets, which so far have existed in a regulatory gray area.

The crypto bubble peaked last December: bitcoin, the largest cryptocurrency, is down more than 80 percent from its high just above $20,000. The total value of all virtual coins is now about $121 billion, down from about $830 billion at the start of the year.

(For a graphic on ‘Cryptocurrencies: growing in number but falling in value’ click,

That has not stopped the hype machine humming.


So-called “influencer marketing” is common on social media, where celebrities and others tout anything from shoes to cars. Also common in these plugs is a lack of disclosure, which may mean the buyer is unaware of a conflict of interest. When it comes to cryptocurrencies however, stricter rules may apply.

In July 2017, the U.S. Securities and Exchange Commission (SEC) published a report on its investigation into digital currencies and warned participants in the market that “virtual coins or tokens may be securities and subject to the federal securities laws.”

The SEC issued a more specific warning about promotion of online fundraisers known as initial coin offerings (ICOs) on Nov. 1 last year. “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,” the SEC said in a public statement posted on its website.

Failure to do so is a violation of anti-touting provisions of federal securities laws, and may also be fraud, the SEC said.

The SEC has not issued determinations on which cryptocurrencies it regards as securities. But the agency has brought enforcement actions against a dozen or so companies connected to ICOs, some of which the agency has identified as unregistered securities offerings, and therefore subject to its regulation.

The SEC has not targeted outside promoters of currency offerings. Its warning in November of 2017 – near the height of the crypto frenzy – alone has led to a “dramatic decline” in celebrity endorsements of ICOs, the SEC’s co-director of enforcement, Stephanie Avakian, said in September. The SEC declined comment to Reuters for this story.
Nevertheless, hundreds of self-styled cryptocurrency experts have emerged over the past 18 months, and their activity has declined only slightly. There are now more than 2,000 cryptocurrencies vying for attention, all promising riches to investors. The vacuum of hard facts on new currencies has left investors vulnerable to hype and bad advice.

“The main reason why so many inexperienced individuals invest in bad crypto projects is because they listen to advice from a so-called expert,” said Larry Cermak, head of analysis at cryptocurrency research and news website The Block. Cermak said he does not own any cryptocurrencies and has never promoted any. “They believe they can take this advice at face value even though it is often fraudulent, intentionally misleading or conflicted.”
ICObench is one of the most popular websites listing and rating ICOs. Its pages are among the top hits in any Google search for a specific crypto project and the word ICO, making it a key site for currency operators to appear on.

Ratings on the roughly 15-month-old website are generated by unpaid “experts” who passed the website’s background check process, ICObench chief executive Maxim Sharatsky told Reuters.

As of Nov. 14, ICObench had 361 experts whose ratings are overseen by the site’s 34 employees based in Moscow, London and across Asia, he said. ICObench had 1.7 million visits to its website between mid-October and mid-November, Sharatsky told Reuters.

The website itself makes money through advertising and a premium model which lets cryptocurrency companies pay between 1 and 40 bitcoin to be featured in newsletters, at the top of search results and elsewhere.

Seven ICObench experts told Reuters they have been approached by cryptocurrency companies or their public relations agents and offered money in exchange for a rating, although none said they accepted any such offers.

Tim Glaus, a co-founder of Alethena, a Swiss-based startup, told Reuters his firm was approached by multiple individuals who said they could arrange paid-for ratings from ICObench experts after Alethena listed its coin offering on ICObench. Markus Hartmann, another of Alethena’s co-founders, wrote about the experience on the blog Medium in June, in what he said was an effort to expose “de facto investor fraud.” Alethena runs a cryptocurrency ratings platform that competes in some areas with ICObench.

Sharatsky told Reuters that ICObench does not sell ratings. When ICObench is informed that experts may have been paid for ratings, he said, it investigates and takes the reviews down if they are tainted.
“We have more than 16,000 ratings on our platform,” Sharatsky said. “Unfortunately, we have (had) accidents with sales (of) ratings, and it’s very bad. It’s a problem for me, for our platform and for all interested.”


Hartmann was contacted in late May on the encrypted Telegram messaging app from a user with the handle “Vagiz,” who offered to get Alethena five-star ratings on ICObench for $500 each, taking a 10 percent cut, according to Telegram messages Alethena showed.

He negotiated to pay $800 for two ICObench reviews and asked for the service to be delivered as quickly as possible, according to the messages. Less than 30 minutes later Vagiz messaged Hartmann on Telegram: “Done. There are two 5* :)”

Vagiz was referring to two five-star ratings from ICObench experts Daniil Morozov and Anatoly Bordyugov, according to Alethena. These were the only new five-star ratings that appeared after Vagiz messaged that he was done, leading Alethena to believe those were the reviews that had been arranged, Glaus said.

Alethena said it paid Vagiz 1.16 ether – another cryptocurrency – for the service, worth about the agreed price at the time. Alethena sent Reuters screenshots of the reviews which have been removed.

A few days later Hartmann paid Vagiz an additional 0.56 ether for a third rating from a reviewer named Jason Hung, according to the messages. “1 rate is done. Hung is from me,” Vagiz wrote, providing screenshots of Hung’s ratings.

Morozov, the ICObench expert, told Reuters he did not take payment for the rating and did not know Vagiz. Bordyugov, the other ICObench expert, did not respond to requests for comment made through his website and sent on LinkedIn. Hung, whose rating still appears on ICObench, also told Reuters he did not take payment for the rating on Alethena and said he did not know Vagiz.

ICObench CEO Sharatsky told Reuters that after Hartmann wrote about his experiences on Medium, he and his staff investigated Alethena’s claims against Morozov and Bordyugov and found that both reviewers did accept money for positive ratings. As a result, ICObench stripped Morozov and Bordyugov of their expert status and took all of their ratings off the site, Sharatsky said. He said the investigation found no proof that Hung’s rating was paid for.


As cryptocurrencies move into the mainstream, some companies have started offering research in formats mimicking the style of traditional Wall Street firms.

Spero Research, based in Sydney, Australia, publishes reports on cryptocurrency projects which are “very impartial” and “very independent,” according to Henry Sit, one of Spero’s co-founders. He compares the reviews to those written by traditional stock analysts.
Nevertheless, the research is commissioned and paid for directly by the projects that are being reviewed, Sit told Reuters. The company accepts payments in ether but will also accept half of the total fee in the project’s currency, depending on “how good the project (is) and how much we like it personally,” Sit said. “There is definitely a conflict there,” he acknowledged. He added that Spero would not change its opinion just because the cryptocurrency project that has been reviewed disagrees with Spero’s conclusions.

Spero’s reports do have general disclosures. But they are not specific about whether a payment was made by the client whose project is being assessed, and if so, how much.

“Spero may be paid to publish research reports – depending on the circumstances, this may be from clients of Spero on the buy-side, or from providers of assets and currencies on the sell-side,” said the disclosure on a cryptocurrency report published in August. “Spero members may hold cryptocurrency that are the subject of research and publication.”

Sit would not say which of Spero’s reports had been financed by their subjects.

Some investors cry foul at such quid-pro-quo research. “Paid reviews should not only be disclosed, they should be outlawed,” said Ric Edelman, head of the wealth management firm Edelman Financial Services and an investor in bitcoin and ether. “Until they’re outlawed, the disclosure should be as prominent as the headline.”


An array of “ICO agencies” has sprung up, as well. These promoters offer crypto issuers active followers and posts on social media platforms such as Telegram, Reddit and Bitcointalk. Online chatter can attract investors, given the lack of conventional financial information available on cryptocurrencies.

Reuters contacted one such agency,, to inquire about the services advertised on its website. An email received in response to the inquiry directed Reuters to a Telegram messaging account under the name of “Papa Karlo.” That user sent a Reuters a price list which said the agency could arrange to provide 630 comments in a Telegram group at a rate of 45 comments a day for $800, payable in the digital currency tether. Reuters was not able to confirm the identity of Papa Karlo. The services he offered were in line with a price list on the firm’s website, under the words: “We create hype through complex solutions which increase community activity.”

“All messages will be relevant to the project and written by professional copywriters with extensive experience in ICO,” according to the price list Papa Karlo shared with Reuters. The list offered comments from “dozens of high-level” accounts on Bitcointalk, as well as posts on Reddit, at prices ranging from $950 to $2,900.

Reddit told Reuters its policies prohibit users from engaging in manipulation or creating multiple accounts to avoid restrictions, and any users detected breaking those policies are “actioned appropriately.” Telegram and Bitcointalk did not respond to Reuters’ requests for comment.

Richard Foster, the UK-based co-founder of cryptocurrency startup Security Token Network, said that in September he paid an individual $50 on the freelancer network Fiverr to help grow his company’s Telegram followership. The seller, going by the handle “heroic_anthony,” assured Foster that the users would not be fake.

“And then within one minute there were like 1,000 people added,” Foster told Reuters. “I went mad.”

Foster said he complained to Fiverr and had the freelancer delete all the fake followers. Fiverr refunded Foster’s money and told him it would investigate the user.
“The circumstances you’ve described violate our terms of service,” Sam Katzen, a spokesman for Fiverr, told Reuters. “When violations are reported, we take swift action to investigate and handle the situation appropriately.” Katzen declined to disclose whether “heroic_anthony” had been banned from the site, or what exact terms of service had been violated. Fiverr’s terms of service, posted on its website, forbid the sale of “illegal or fraudulent services.”


Another service on offer from ICO agencies is paying writers to publish stories mentioning their clients, or linking back to their clients’ websites, according to interviews with four agencies and six email offers seen by Reuters. Prices range from as little as $100 to as much $10,000, according to interviews and messages.

A cryptocurrency data company showed Reuters an email it had received from an individual offering an article on business website for $2,500. The post, which would feature a company’s name and website, could be delivered in six to eight weeks, the email promised. The email included a coupon for a $500 discount. said in a written statement to Reuters that its editorial guidelines explicitly forbid contributors from receiving payments in exchange for stories. Forbes did not share its editorial guidelines with Reuters.

Earlier this month, Forbes removed a post under the byline of Harold Stark, originally published late last year, which referenced a cryptocurrency issuer, after Reuters inquired about it. In a statement to Reuters this month, Forbes said it had discovered in early 2018 that Stark violated its editorial guidelines. It is not clear if Stark accepted payments for his Forbes post. Stark did not respond to a request for comment on LinkedIn.

“We terminated our relationship with him and removed all of his content from our site at that time,” the statement said. “Due to a technical glitch, his prior content reappeared, but we have removed the content once again.”


Cochin Herald

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