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A large number of cryptocurrency projects follows a deceiving pattern of behavior, indicates WSJ Report

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A research report published on December 27 by the Wall Street Journal (WSJ) shows that numerous cryptocurrency offerings reflect signs of fraud, plagiarism and improbable returns.

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In the process of the research, the WSJ team studied some 3,291 “white papers” of cryptocurrency projects with Initial Coin Offerings (ICO) gathered from three websites, ICORatings.com, Tokendata.io and ICOBench.com.

In 2017, ICOs became the talk of the town when many reportedly introduced the concept of cryptocurrency, blockchain and other industry related terms into their projects. Many just to woo the investors under the waves of a rising market. As a result, more than half of those ICOs failed in the Q1 of 2018.

These ICOs followed a very similar pattern including publishing a white paper, crypto-based website, announcing a team, setting up telegram groups.

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The research report upon analyzing the documents and excluding the non-English and duplicate papers in the process says, “To identify duplicate language, the Journal compared sentences with at least 10 unique words to every other sentence in other white papers. Reporters then read and reviewed nearly 10,000 sentences appearing more than once among the 3,291 papers analyzed and removed technical and legal sounding language. Then, the Journal compared reported offering dates to determine which document first published any given sentence and excluded those projects from this database.”

The results of the analysis indicate that 16% or some 513 studied documents presented the signs of identity theft, plagiarism, and promises of high returns. The language of nearly 2,000 white papers out of total analyzed documents contained deceiving sentences with terms such as “nothing to lose, guaranteed profit, return on investment, highest return, high return, funds profit, no risk and little risk.”

Apart from studying the paper the investigative team also identified fake members included in the projects team by using methods like reverse image search.

Last August, another report from WSJ claimed that cryptocurrency price manipulation is done by organized “trading groups” using services of Telegram and other such apps. The report cites this development as the reason behind the crash of the cryptocurrency market.

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