It started the same way other ICOs began, or so it seemed. The website of Denaro, a newly built payment platform aimed to connect cryptocurrencies and the mainstream market, had the tagline “Crypto Liquidity At Your Fingertip”. The site described itself as a “versatile payment solution” that will allow users to spend, store, transfer their digital currencies via an “intuitive interface” and debit card. It also promised a “multi-cryptocurrency wallet” that will remove the need for multiple addresses and give users the opportunity to spend them in any store or ATM.
Denaro was also backed by a “powerhouse” team of “blockchain enthusiasts” and “tenured specialists”. Two media sites wrote a glowing description of Denaro in early February this year – a month after the project was announced on BitcoinTalk.org. Techbullion.com touted the ICO as a “versatile” payment solution, while Coinannouncer.com calls it as a “potent tool to solve the crypto liquidity problem”.
Its pre-sale lasted for seven days while the ICO was offered from late January to March with 2.5 million DNO tokens made available at 1 ETH to 3,000 DNO – plus a 25% bonus. But a few days ago, March 23, a Reddit commenter posted under r/CryptoCurrency/ that Denaro “have just scammed investors and ran away with $8.7 million”. A Telegram chatgroup @denarochat was also created by victims scammed by Denaro. A Telegram user named Krishna, an admin of the chat group who also claimed to have been scammed, posted that around US$11 million was raised by Denaro’s ICO, “with 48.50 million tokens sold”.
Currently the website of Denaro is not accessible. According to Reddit commenter “monkofd”, Denaro has not been responding to emails and all of its “social media platform communication has been cut..” The same Reddit user posted a message from Denaro’s “official bounty manager” which confirmed Denaro’s non-communication and why the company aroused no suspicion during its ICO launch: “When we were agreeing with them, they showed us their LinkedIn profiles and they were approved by Newswire verification which is a worldwide PR service. That is why we didn’t have any suspects and started the bounty program. The team went missing 1 week before the end of the ICO and we tried to contact them every way possible. Even though they distributed the tokens, since they didn’t have the product, tokens lost a lot of value. We are trying to find the these scammers, any help would be appreciated.”
Similarly, Denaro’s Telegram chatgroup is now inaccessible. Victims are now scrambling to get the word out of Denaro’s illicit tactics, with some reaching out to media organizations such as CNN, CNBC to further out the people behind the scam. A Telegram user named Mike McCarthy has reported Denaro to UK Action Fraud while more victims are posting about their experience on the chat group.
The Red Flags
Were there red flags before everything hit the fan? Bitcoinexchangeguide.com noticed that Denaro was already launching its ICO despite offering no products or service. Also, no dates were provided on when the token sale and distribution would happen.
The whitepaper available on the Denaro website had no links to the social media profiles of any of its team members. Information on the people behind Denaro were vague. Its CEO, Ron Ramsey, has no prior experience with blockchain technology other than “actively following and researching” it online. Meanwhile, Denaro’s CFO, Jeremy Boker, was described as having established “a very respectable history of happy clients over the last decade” as “Project Manager, Head of Information Technology and Business Consultant.” It was unclear if he performed all the mentioned responsibilities at the same time and no information was given to which company he did these tasks for.
Reddit user “monkfold” continued giving evidence of Denaro’s fakery by citing the pictures and profiles of its team members as coming from generic photo sharing sites. He showed how their CFO’s picture actually came from pexels.com, so was its Legal Department Head Amy Archer’s image which purportedly was from mstudio.es.
Currently, forty users are registered in the Telegram chat group put up by victims of Denaro. Their own research revealed that Denaro has morphed into Plutocoin.org which claims to offer “Crypto Liquidity at your Fingertip”. Telegram user Peter Sjöström noted similarities between Denaro’s template and Plutocoin.
Similar too are the descriptions of Plutocoin’s team members and that of Denaro’s, with a few tweaks done on the former, albeit haphazardly. While Denaro’s CEO Ron Ramsey was “actively following and researching blockchain technology”, Plutocoin’s Chief Managing Director Dmitriy Baday was also described to be “actively researching blockchain technology”. The names of Jeremy and Ron are also seen in a few of Plutocoin’s team members’ descriptions despite no such Jeremy and Ron are listed as members in Plutocoin’s team.
Telegram user Scott even gave a reference to the origin of the name Denaro by citing a Wikipedia entry on Matteo Denaro – a Sicilian Mafia boss who also went by the nickname “Diabolik”. According to Forbes magazine, Denaro has been a fugitive since 1993 and is currently considered as one of Italian mafia’s “unchallenged boss of all bosses”.Telegram users are now pooling their energy and resources to advise media entities of Denaro’s illicit strategy and looking for ways to refund their investment.