We are putting PointPay under investigation
ICO Patrol is a group of industry professionals and entities launched with a goal of investigating ICOs, IEOs and investment opportunities in the blockchain industry. With a large network of professionals in the legal and financial sector, our goal is to bring suspicious projects and their teams to justice and protect the community from fraudulent activities. Our first 12-month case is focused on PointPay, a company we have identified on different ICO promotional platforms. Before we start with any further activities, PointPay team can contact us for any clarifications, discussions or potential termination of our investigation by the 8th of October 2019: ico.patrol@gmail.com
5 REASONS WHY WE ARE PUTTING POINTPAY UNDER INVESTIGATION
1) They are hiding their presence at the events
If you do research on PointPay, you will notice that they do not have any presence at relevant industry events. They are publishing pictures showcasing their logo on different conferences, but they are not willing to expose their activities or identity at these events, nor present their project to wider audiences. Their team is also not publishing any video content personally promoting the project, PointPay team members or their activities. As far as we know, they are doing their best to hide from the public.
2) Ownership is hiding behind the curtains
If you investigate their website or any relevant sources, you will notice that the ownership of the company is not publicly disclosed. Their current management team includes different people that are not founders of the project. The owner does not want to promote their identity or be the face of their brand. Yes, as they have stated, they are investing personal funds in the project, but what worries us is that 33% of scam projects invested up to $200,000 into building a product or promotional activities to execute their fraudulent campaign.
3) The management team seems completely irrelevant
PointPay team is trying to build an ecosystem of financial services, disrupting one of the hardest industries to break into. In this section, we will focus on the management team members that are responsible for the execution of the project. While we will include more details in our report, we will not discuss their tech team in this article — anyone with a budget can hire good developers. Here are some relevant facts:
· Their current CEO, Andrey Svyatov, started as interpreter and translator in the blockchain space, later establishing himself as a self-proclaimed advisor to ICO projects “that raised 21 million”, and then started working as advisor with PointPay, later taking a position of their CEO — from an translator to a CEO of a company that is set to compete with leading financial institutions.
· Their current COO, Anna Foster, does not have any relevant operational experience in the finance industry. She started as a General Project Manager and later took the position of the chief operating officer at PointPay. Previously, she held numerous positions outside the finance industry as interpreter, project or affiliate marketing manager and a founder of “Foster Group”, a startup offering various services (e.g. e-commerce) without any relevant evidence of success or existence in the industry.
· Their current CMO, Aleksandr Sviatov, has no marketing experience in the banking or financial sector. He is a self-proclaimed ICO advisor that worked on “promotion and marketing of numerous projects”. Someone at PointPay made a decision to hire Aleksandr as their CMO, a person that has no marketing practice in the financial sector and was never part of any major promotional campaigns connected with established companies or pertinent agencies. ICO campaigns do not count as experience in our books.
· Their team is not speaking at any conferences, conducting any public interviews or attending any RECOGNIZED podcasts or debates. What we have actually noticed in 2017 is that most projects that conducted suspicious activities and were not exposing themselves publicly were claiming that they want to focus on building the product first. We have written “recognized” here because you can always pay some YouTuber or smaller podcaster to interview you — whenever a project is promoting their exposure, make sure to check the credibility and the reputation of the source. By reputation, we mean image within recognized industry circles, not public ICO communities.
BE AWARE: MAJORITY OF PROJECTS IN 2017 RAISED FUNDING THROUGH THE ICO MECHANISM. 90% OF THEM WERE SCAM OR HAVE FAILED TO CREATE ANY VALUE ON THE MARKET. A LOT OF PEOPLE ASSOCIATED THEMSELVES WITH THESE PROJECTS AS ADVISORS, MOSTLY CONDUCTING IRRELEVANT ACTIVITIES WITHIN THE PROJECT (E.G. TRANSLATION) OR PUTTING THEIR NAME ON THE WEBSITE JUST TO CREATE EXPOSURE FOR THE FUNDRAISING CAMPAIGN. THESE PEOPLE LATER STARTED CLAIMING THAT THEY ARE EXPERTS OR TOP RANKED ICO ADVISORS. YOU NEED TO JUDGE PROFESSIONALS BY THEIR PERSONAL ACCOMPLISHMENTS, ROLES WITHIN PROJECTS THAT THEY WERE ADVISING AND THE CURRENT STATE OF THOSE PROJECT (THE CURRENT STATE OF THE COMPANIES THEY WERE ADVISING, ACHIEVEMENTS AND PROGRESS SINCE THE FUNDRAISING ROUND, THEIR PUBLIC IMAGE AND EXPOSURE, IMPACT, ETC.).
3) Absence of industry professionals from the finance industry within the advisory board
Please do not get us wrong, certain individuals on their list such as Elias Tan or Naveen Kapoor do have a solid experience and bring a lot of potential value to the project, but primarily because of their earlier positions and not the ICOBench or other irrelevant ranks. The only thing that worries us here is that Mr. Kapoor is associated with a large number of ICO projects and that is usually a clear red flag that someone might be fishing for financial opportunities — statistically, credible advisors are associated with two projects per year on average.
Here are some facts that we need to discuss so you can conduct your own research more efficiently:
1) FACT #1: ICO Bench is known for paid reviews and scoring policies among their advisors. They rank their advisors based on the projects they have reported on their portfolio and the fundraising data those projects have reported at the ICOBench platform. This means that anyone’s rank on the platform can be easily manipulated and carries no relevant value in the industry. Furthermore, many financial institutions are now investigating the fact that the majority of projects are reporting false fundraising data to create exposure for their future campaigns.
2) FACT #2: Hamza Khan, so-called ICO expert and #1 ICO advisor on ICOBench, has 13.8K followers on Twitter (notice that he is not followed by any relevant professionals or blockchain entities), out of which over 32.7% (4,498) are fake followers (you can check fake followers via free Twitter audit services online) and the rest are not engaging with the content Mr. Khan is posting. Some of the posts that Mr. Khan has posted get 1 like on average. He has been associated with a significant number of failed projects (we will include a thorough analysis in our report) and we were not able to find any previous or credible experience outside the scope of ICO advising.
Let me remind you of our previous statistic stating that credible advisors get associated with 2 projects a year on average. IN 2019 alone, taking into consideration the analysis of LinkedIn, HAMZA KHAN HAS BEEN ASSOCIATED AS ADVISOR WITH OVER 50 ICO PROJECTS. WE ARE TALKING ABOUT AVERAGE PROJECTS, NOT MAINSTREAM COMPANIES. WE WILL PUBLISH RESEARCH ON THOSE PROJECT AND THEIR ACTIVITIES.
After we conducted further research on Mr. Khan’s social media profiles, without any disrespect, we had to ask ourselves a question, “does this Twitter cover image look like something a serious industry professional would upload on his profile or even promote?” From our experience, when you get to a certain level in your career and you are considered an expert, you do not have to promote your accomplishments as your reputation sells itself.
3) FACT #3: Some of their other advisors (let me remind you that we are talking about a company that is trying to disrupt the most complex and politically influenced industry and not a startup building a social app) include a business student and an intern at IBM, and accomplished individuals without any experience or influence in the banking or financial sector.
Our team will reach out to certain individuals on their advisory board with further inquiries and request for comment. We will keep you updated on the findings.
4) Marketing strategy based on potentially manipulated reviews
PointPay’s marketing strategy is based on ICO RATINGS that they are promoting at the top of their website. These are ratings that can be manipulated and financially influenced. You can easily buy good ratings on these platforms and manipulate their scoring system. Besides, these platforms are not considered a reputable source of validation for ICO projects. Here is an investigation into ICOBench by Markus Hartmann: THIS IS HOW EASY IT IS TO BUY ICO RATINGS showing how easy it is to buy great ICO ratings.
Another article: ICO Rating hit with SEC fine after failure to disclose paid reviews (SOURCE)
We have also noticed that their team started posting Medium articles with topics that are not related to their industry or expertise. Nonetheless, these articles are short, unprofessional, and display no competency in the subject. Our assumption is that they have hired a cheap freelancer on Upwork or Fiverr to write random blockchain articles that their team can share and promote.
5) Other suspicions
Other suspicions include their team promoting a news app as an MVP on some platforms; user complaints on websites like Bitcointalk; fake followers on social media (just compare the number of their followers with the engagement they are receiving on their posts); no relevant technical or other data in their promotional materials; they have collaborated with a suspicious exchange conducting questionable activities, VinDAX, on their IEO that failed; lack of partnerships in the banking or blockchain sector; no legal structure or licenses (licenses that they are planning to acquire in the future without any information about their strategy); no marketing campaign or activities; they are publicly offering a 10% referral fee to people that can connect them with investors (no connections with credible investors or brokers), etc.
PointPay team is claiming on Bitcointalk that their initial fundraising round “didn’t raise that much funds through an ICO campaign due to severe market conditions” but the truth could be different. Actually, conduct your research and you will see that every legit ICO conducted in 2019, managed to successfully raise their funds through partnerships and collaboration with relevant institutions or receive support from a credible VC to take the campaign to the next level. The issue starts when the due diligence process is initiated and investors start looking into your company and execution (we are not talking about a product that anyone can build with some resources, we are talking about proper execution and demonstration of skills that are necessary to build a successful company).
WE HAVE NOTICED THAT POINTPAY HAS ANNOUNCED A RELEASE OF THEIR PRODUCTS. THIS IS NOT AN INVESTMENT ADVICE, BUT PLEASE BE AWARE THAT 81% OF ICO PROJECTS ARE SCAM. OUT OF THOSE 81%, 40% OF SCAM PROJECT HAVE RELEASED WORKING PRODUCTS BEFORE THEIR ICO CAMPAIGN AND TERMINATED THEIR ACTIONS OR HAVE NOT CONTINUED DEVELOPING THE PROJECT AFTER THE SALE. FURTHERMORE, WHEN YOU ANALYZE A PRODUCT, MAKE SURE TO ANALYZE THE SIZE AND THE ENGAGEMENT OF ITS USERBASE AND THE QUALITY OF ITS INFRASTRUCTURE.
BEFORE MAKING ANY INVESTMENT DECISIONS, YOU NEED TO FOCUS ON RELEVANT FACTS SUCH AS EXECUTION, PARTNERSHIPS AND EARLY ACHIEVEMENTS. IF YOU EVER LAUNCHED A STARTUP, YOU SHOULD UNDERSTAND THAT BUILDING A PRODUCT IS EASY — MAKING A SUCCESSFUL COMPANY IS DIFFICULT. IF THE TEAM IS INCOMPETENT AND MAKING BAD DECISIONS, YOU SHOULD MAKE AN ASSUMPTION THAT THEY WILL NOT BE ABLE TO BUILD A SUCCESSFUL BUSINESS AND ESTABLISH A LARGE USERBASE THAT WILL ACTUALLY USE A CERTAIN ASSET. 95% OF STARTUPS FAIL DUE TO LACK OF COMPETENCY, MAJORITY OF THOSE FAILED COMPANIES HAVE A WORKING PRODUCT.
FURTHER ACTIONS AND INVESTIGATION ACTIVITIES
We have hired three investigation associates that are currently conducting further audits and analysis of PointPay and its team members. Our legal team will also be looking into their legal structure and corporate entity in the UK and reach out to relevant parties within the government to check the status of their licenses. We will be publishing a detailed report on PointPay team and their company soon. Further actions that ICO PATROL will be taking:
1) Sharing our detailed analysis of PointPay and other projects with investment funds and blockchain communities. We have over 460 VC, blockchain and syndicate investors in our database. If you are an investment fund that would like to join our informative service, send us a message: ico.patrol@gmail.com
2) In case of suspicion, reporting PointPay and its advisors directly to SEC and other relevant legal parties in different jurisdictions in Europe, Russia, and Asia where we have relevant connections to conduct further investigation.
3) Select 2 more team members and initiate a campaign on social media and forums promoting our reviews and conducting further analysis as a way to protect the community from any fraudulent activities or bad investment decisions.
4) Reach out to rating platforms and their founders through our network to investigate PointPay’s scoring system and report them to relevant legal and other parties in case that we notice any fraudulent activities.
5) Conduct a thorough analysis of each member of the PointPay team, including their advisory board and the companies they were affiliated with. In specific cases, we will also reach out to previous employers for more information. Our team will report any suspicions to relevant governmental and legal parties and share our findings with the community and our network.
6) Striking partnerships with large media platforms to promote our reports and research activities to millions of readers across the globe in the following 12 months.
7) Start a community campaign promoting our report to community members on platforms such as Reddit and Bitcointalk where the majority of smaller bounty campaigns are being conducted.
8) Start an investigation campaign and reach out to financial and other banking institutions in Russia, Europe, and the US, to inform them of our findings and investigate PointPay’s activities.
DISCLAIMER: Before we start with any further activities, PointPay team can contact us for any clarifications, discussions or potential termination of our investigation by the 8th of October: ico.patrol@gmail.com
THANK YOU FOR TAKING THE TIME TO READ OUR REVIEW. MAKE SURE TO FOLLOW US FOR MORE UPDATES AND NEWS ABOUT OUR ACTIVITIES AND POINTPAY INVESTIGATION. THIS ARTICLE SERVES AS INVESTIGATION ANNOUNCEMENT, NOT INVESTMENT OR LEGAL ADVICE. MAKE SURE TO CONDUCT YOUR OWN RESEARCH PRIOR TO MAKING ANY DECISIONS.
