Dark coins aren’t just useless cryptos that float along hoping to get the attention of uninformed investors, they take specific steps to step into the limelight and deceive the public. That’s not shocking news, but it was further proven by CoinDesk’s recent report on Gotbit, a volume-faking project based out of Russia.
Gotbit was founded in 2018 when the initial coin offering (ICO) craze was at its peak. Alexey Andryunin, a 20 year old college student, co-founded the operation with an unnamed partner. Andryunin takes care of bringing in potential clients while the partner works on the code that creates the fake volume.
Gobit’s bots then fake trade volume for the customer. How much it will do that depends on how much the ICO is willing to pay. To get listed on CoinMarketCap, Andryunin charges $15,000. Once there, bigger exchanges might pick up the token, thus getting them more buyers and volume. They keep climbing the ranks, bringing in more money.
In his interview with Coindesk, Andryunin was very honest about the nature of his business, the ICOs that are willing to sign up for it, how exchanges view his type of operation, and where the market is generally heading. When asked why his company isn’t registered in any jurisdiction as a business, he replied, “The business is not entirely ethical.”
Of the 30 current dark coins that are paying for Gobit’s services, Andryunin believes only two or three will provide any actual value. The rest have secured investors who are now anxious to see any kind of market activity for the money they’ve put in.
Exchange’s likely know what’s going on, he believes, but because it’s also in their interest to have increased volumes, they allow the practice to continue. But he doesn’t expect it to last for long. “I think FATF (Financial Action Task Force) will shut it down quickly: the cryptocurrency exchanges will be regulated like NASDAQ and pumping fake volumes will be banned,” Andryunin said.
As a result, Andryunin is already planning his exist strategy, which mostly consists of finishing school and finding the next opportunity. His frank honest though is appreciated, and very revealing.
This just about confirms the corrupt system that dark coins and exchanges abuse to steal wealth from otherwise well intentioned investors. Fake some volume, get on a few exchanges, get more volume, and eventually end up on the biggest of unregulated exchanges, while never having to prove any utility.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.
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