Crypto.com: Anatomy of a Cryptocurrency Scam (Part Two)


9 min read
Crypto.com: Anatomy of a Cryptocurrency Scam (Part Two)

Preface (and a word of warning): Their original ANN thread is UGLY! So if you're a (substantial) investor in this project and you're afraid to read things that you may perceive as... negative or antagonistic (that's not what this is) toward your favorite project ($MCO), then you should proabably close down the page here

The link to Monaco's (now infamous) ANN thread can be found here: https://bitcointalk.org/index.php?topic=1926269.0

If you followed the link provided above you'll probably notice that the title of the forum post was revised to "null" and the initial forum post itself, written by a user named, 'tokenmarket', was also removed (re-edited because Bitcointalk does not allow you to remove these posts).

"Scammer" Warning / Disclaimer

Chances are you may have noticed the presence of a very large, red banner at the top of the webpage that stated:

"Warning: *One or more bitcointalk.org users have reported that they strongly believe that the creator of this topic is a scammer. (Login to see the detailed trust ratings.) While the bitcointalk.org administration does not verify such claims, you should proceed with extreme caution.

For diligence sake, we decided to log into our trusty old Bitcointalk account to view the claims that were made against 'tokenmarket' (alias for Kris Marszalek - the founder of Monaco).

Taking a Peak at the 'Trust Ratings' for the 'tokenmarket' Account

In order to see the same trust ratings for the user, 'tokenmarket.net', individuals must create a 'bitcointalk' account. However, we already have one, so we went through the trouble in advance. But if you want to confirm for yourself (since this link obviously can't be shared), the only barrier to doing so is just creating an account, then clicking on the user's profile in question whom you want to "audit".

The 'trust rating' section on bitcointalk is divided into two parts.

The "top half" is shows trust ratings given by 'trusted users' (i.e., those that have been in the community for a fair amount of time that also have very positive trust ratings themselves) and "untrusted users", which essentially includes everyone else.

Quick Word About 'Untrusted' Users: The word 'untrusted' is commonly misconstrued as distrusted. Please keep this distinction in mind here - the user feedback in the 'untrusted' section is just that - un-trusted.

Taking a Look at the Trusted Reviews Given to the CEO of crypto.com / Monaco

The claim made on the bottom is interesting because it gives us a really interesting lead on what else Kris (CEO of Monaco / crypto.com) may be tied to in the crypto space.

Specifically, the text of that complaint (by a very trusted user in the forums), states the following:

"Busted Merit Abuser. This guy exchanged merits with peach56 (posible [sic] alt account).
Check the reference or proof.

The action that 'tokenmarket' (Kris) is accused of is inconsequential to us (merit sharing), but what is very interesting is the allegation that 'peach56' serves as an "alt account" for Kris.

The interest compounds when considering the date that this event took place (March 2018), which was well after the ICO had taken place for $MCO (Monaco at that time).

The user in question provided documented proof for their accusation, which can be accessed without an account at this link: https://bitcointalk.org/index.php?topic=3358105.msg35171302#msg35171302

Examining the 'peach56' Account

To be clear, there is no definitive proof that 'peach56' is a sock puppet account for 'tokenmarket', but it still seems worthwhile to take a peak into the 'peach56' account.

The account profile's link is found here: https://bitcointalk.org/index.php?action=profile;u=1308233

The user's post history can be found at this link (start to finish): https://bitcointalk.org/index.php?action=profile;u=1308233;sa=showPosts;start=0

Note: Bitcointalk generally does not allow users to delete their accounts and posts are generally not eligible for deletion after a small period of time has passed, too. Additionally, usersnames are immutable once created on the website.

The user's posts (peach56) are not the most interesting / riveting thing in the world, but the syntax of the user's speech (capitalization, punctuation, misspelled words, etc.) seem to very closely mirror the 'tokenmarket' account.

Obviously, a statement like that, on its face, would (and should) normally be taken as a wildly speculative assumption.

However, in Kris's particular case, this should hold some weight.

Take a look at the first post (available) on the initial 'Bitcointalk' ANN thread for "Monaco": https://bitcointalk.org/index.php?topic=1926269.0

Also, while we're on the topic - let's take a look at the initial post (available) on the Bitcointalk forums for Monaco (crypto.com).

Evaluating the Actual ANN Proposal for Monaco / Crypto.com

At first glance, one clear observation that can be made here is that it is clear that Kris (CEO of the project) is entirely unfamiliar with the normal format of ANN threads in the blockchain space.

For those that do not know, "ANN" stands for 'announcement' on the bitcointalk forums. Its signifiance derives from the age-old tradition (in blockchain years) of projects 'introducing' themselves to the community "officially" via an ANN thread.

Essentially, this thread is akin to writing the name of one's project down in a book of 'confirmed' pending projects that users should add to their own personal list for projects that are going to launch at some point in the near future.

ANN Threads and Bitcointalk Are Taken Seriously

If you don't know the history of the 'bitcointalk' forums, then you shouldn't be faulted for thinking to yourself that this analysis may gbe overstating the value of insights gleaned from the site itself.

But for those that do know - the reliability of this site allows it to serve as a beacon of light in the blockchain space.

The 'bitcointalk' forums are descendants of the initial forum setup that Satoshi Nakamoto createdd to facilitate greater discussion of Bitcoin's development. As such, these forums were essentially 'ground zero' for much of the development done in Bitcoin's early days.

Also, at that time social media was nowhere near as prevalent as it is today and Bitcoin was too fringe (around its inception in '08/09) to exist in any meaningful way alongside the slew of irrelevant content /limitations imposed by external sources. So the forums not only represented a reliable home base, but an all-encompassing platform for any and all bitcoin-related conversations, relationships, collaborations and ideas throughout virtually the entirety of its formative years.

Back to the ANN Post

As stated above, the post is written in such an informal manner that it would be hard to call it an 'ANN' thread if not for the clear evidence from user responses to the thread that it was designated as such (before eventually being re-named to "null" for whatever reason).

The entire message itself is encompassed in quotes, which implies that the user 'tokenmarket', may not be Kris but rather a 'proxy agent' of some sort (which is common on Bitcointalk forums for new users that are looking to launch ANN threads, due to the posting / reply restrictions on new accounts on the forums). However, such proxy posts are typically only done for the initial ANN post itself, with all subsequent replies coming directly from the owner's account that the initial poster was serving as a proxy for. In this case, the account 'tokenmarket' continued to respond to replies within that same thread (which also grew to an astounding 458 pages before eventually becoming "dead" due to inactivity and unresponsiveness once the team 'swapped' over to "crypto.com" - again, more on this later).

The initial post also states that the project was somehow able to accrue over 10,000 Ethereum in its first few hours of existence despite no one in the cryptocurrency being aware of their existence just 48 hours prior to the post (this is according to Chris, not us). This claim is even more astounding when considering that Kris is revealing this information in what he stated was his first post on Bitcointalk. That same post also explicitly states, "[W]e think since we had zero pre marketing ahead of ICO launch..."

Kris also claims that the one day advanced notice of their token sale was due to a "competitor" that he (or his team; neither is specified) at an "FX+crypto" event (again, no greater details given).

The Numerous Contradictions in Kris' Initial Post Serve as the Biggest Red Flags

Putting aside the numerous spelling mistakes laden throughout a post that Kris knew would serve as his a 'first impression' to the crypto community as well as the refusal to adhere to any of the age-old standards of an 'ANN' post on the bitcointalk forums despite having the knowledge necessary to seek out (potentially) a more senior member of the community to represent him on the initial post (another red flag), there are numerous additional incosistencies throughout the ANN thread that should have immediately signaled to investors that something was VERY off.

Inconsistency #1

In one sentence, Kris states:

"We made a judgement call to finish working on our ICO within a week and launch, then spend the next 30 days to gradually build exposure ..."

However, in the prior paragraph, Kris was providing an explanation for why the team opted to launch the project with oly a "1 day notice".

Inconsistency #2

Kris claims that his "CFO" (unnamed) was at another event on May 11th (the ANN post is dated May 20th), when said individual ran into "another founder" who, "basicaly told him what they're working on and their ICO is going to launch in June."

Then claims that that he wanted to give everyone "plenty of time to get to know us and do their due diligence" despite acknowledging that the ICO was launched with nearly zero forewarning or preparation.

Ensogo

Ever heard of 'Ensogo' before? You aren't alone because we didn't either.

But apparently that was the name of Kris Marszalek's venture prior to launching Monaco.

Curiously, it appears that Ensogo was popular enough to warrant its own Wikipedia page (yes, this is the same Ensogo - we checked) - which can be found here: https://en.wikipedia.org/wiki/Ensogo

As seen in the first paragraph of the Wikipedia entry, the company is now defunct.

What Happened With Ensogo?

By all accounts, Ensogo came to a crashing halt in 2016.

Per the Wikipedia entry (don't worry we're going to corroborate this with many more additional sources), the company ended when:

"On June 21, 2016, Ensogo announcd that it will shut down all South East Asia operation (including Hong Kong) and its CEO Kris Marszalek has resigned; it also requests ASX to suspend shares trading."

Also

"The unprecedented shutdown affected operations in several countries; workiers in Singapore found the office was closed, Hong Kong sellers call for police investigation of fraud and certain stores in Thailand rejeccting deals purchased by customers, though the Consumer Protection Board is expected to summon Ensogo for remedial issues."

Obviously, since the situation occurred a few years ago, this Wikipedia entry deserves an update if anyone decides to follow up on the situation and complete that task.

But for the purposes of this report - we'll go ahead and take up that responsibility (here only; not on Wikipedia), so that we can get a better idea of what exactly transpired with Ensogo because it appears that it came to a climactic end for no apparent reason.

"Chasing Ensogo"

The first lead we came across was the following article, written in June 22nd, 2016, in the immediate aftermath of the shtutdown: https://www.thestandard.com.hk/section-news/section/11/170732/Anger-as-BeeCrazy-buzzes-off

As the article notes, it appears that 'Ensogo' was operating under the name, 'BeeCrazy' at the time after being acquired by company, "Living Social".

The article alleges that immediately after the shutdown, "Several business partners of the...website...sought help from the police, alleging fraud."

The article also affirms that Kris Marszalek's resignation coincided directly with the abrupt cessation of Ensogo's business and that:

"The website, which stopped receiving orders yesterday, has left hundreds of thousands of customers and sellers empty-handed."

Addtionally:

"The Consumer Council of Hong Kong said it had received **12 complaints*8 and 163 inquiries about the closure of the online platform."

The article details the debacle even further by noting that there was so much widespread ire caused by Ensogo's abrupt shutdown that a Facebook gropu called, 'business owners and victims gathering zone' was created as a means of aggregating all individuals alleging they had been defrauded by Ensogo.

Monaco's Woes

As mentioned prior, Monaco introduced itself to the cryptocurrency sphere in May 2017.

Less than a day after its initial introduction, it offered its tokens for sale, eventually amassing well over $20 million from investors in the cryptocurrency space on the premise that 'Monaco' (MCO) would be able to manifest and distribute a physical 'credit card' that would enable users to use cryptocurrency to spend funds at various vendors.

Spoiler Alert: Kris Marszalek and Their Team Never Delivered

As you may have guessed by this point, Kris Marszalek and his team never delivered those credit cards as they had originally promised.

As numerous frustrated investors made clear on the 'ANN' thread that was crafted for Monaco - not only did the team fail to deliver on its original promise, there was also no accounting or accountability for the $26 million that they had received from their ICO.

Below are some of the responses from the community in late 2018 (before the project abruptly 'rebranded' to "Crypto.com" and retitled the thread to "Null"):

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