So the other day an acquaintance of mine told me that an acquantaintance had bough a new cryptocurrency. I was immediately intrigued and inquired for more details. I was then sent a website that proclaimed to know the secret name of the cryptocurrency which will become Sweden’s officially adopted cryptocurrency. They further claim that knowing this name now will help you profit immensely from the coin. To make matters more urgent the company says that they know that Sweden will soon release the name of the coin to the public and then the investment opportunity will be over.
It took me a few seconds to see that this offer is totally a scam. In this article I will show you how you can detect fraudulent websites and not fall prey to a scam.
We will first go through the entire website and comment on the various sections. Then we will start to Google certain things. For the last part I have actually signed up to the website and immediately received a phone call. I will also share that call with you. I did not proceed further as any further steps would have required me to send money to them and I wasn’t willing to do that to proof a point.
Here you can see a screen capture of the entire website from kryptonexlabs.
The Red Flags on the Website
1. HTTP vs HTTPS
The first thing we notice is that the website looks quite nice. It does have a great design and it looks like a great opportunity at first glance. The very first clue that something is wrong can be found next to the URL:
Usually websites will use https. What this means is that all communication with the website is encrypted and a hacker can’t easily read what you are communicating. This is especially important on websites such as online banking or other financial sites where you store money. For normal websites it is still good practice. So not having an https website might be a first indicator that something might be wrong.
2. Celebrity Endorsements
So six famous people are all supporting this particular cryptocurrency. This already seems rather fishy. If it were such a great opportunity for investment and these six people would seriously endorse it then the opportunity wouldn’t be so secret anymore. Just quickly using Google will show you that the only results for Bill Gates and Sweden will be from kryptonexlabs. Especially considering what he posted in a recent Reddit AMA it’s unlikely he would endorse this particular cryptocurrency.
3. Really high profits
So an investment of 1 EUR should turn into 3200 EUR within a few months? I have a few issues with this statement. First the number 3200 just seems random, why not 2500 or 7000? There is also no rationale as to why this should happen apart from very flimsy comments about buying before anyone else gets a chance. Also what is Old Money supposed to be? Swedish Krona? Also they seem to want to indicate that you need to buy this Sweden coin now because later on there will only be 300’000 more coins. (If there are 28’700’000 coins for sale now and the total supply is 29’000’000 then that only leaves 300’000).
4. Feature Buzzwords
- Decentralized: So the cryptocurrency of a country is decentralized? Why would a country issue a cryptocurrency that is totally out of their control. I guess Sweden is quite forward thinking and modern, but still very unbelievable.
- Secure: Well yes alright that is the feature of each and every cryptocurrency out there…
- Public: Same as with secure… What is so special about this? If you don’t know what a blockchain is read my article here.
- Anonymous: First the sentency as grammatically false. It should be Anonymity. IF you have anonymity then you are anonyomouns. Apart from the grammar mistake (btw excuse my own mistakes as English is not my first language) the sentence is also technically rather unrealistic. How should a user be able to define something in a program written by someone else. Even if this were possible what would be the motivation behind this feature for a coin that could be used in Sweden?
- Digital: Well that’s news… Same as secure and public, it’s just a fact of what a cryptocurrency is.
- Stable: Pretty much every cryptocurrency (there are some exceptions) is stable.
So we have 6 features that might at first glance look like a really cool thing, but their totally not.
5. The Video
There is a video on the website. It is quite well made and looks professional. However the content is total rubbish. I’ll write down a transcript for you so that we can analyze it. I am going to mark some of the parts so that you don’t have to read the whole thing if you don’t want to. (I’m actually feeling brainwashed after having watched that video 5 times to write down the transcript).
It’s finally happened. For the first time ever a major 1st world country, Sweden, has officially backed a new, emerging cryptocurrency and will be using it as the official coin of Sweden! You heard that right, Sweden has decided to beat all other countries to the punch and has officially backed a crypto and will be promoting it for use within their country and abroad. This is huge news for the financial world as it’s not only the first time a major government has endorsed crypto, but Sweden is going 10 steps farther by actually naming a certain coin as their official cryptocurrency. We don’t have to tell you what this news will do to the price of that coin once released. It will immediately skyrocket and continue towards the moon for months and years afterwards. Want to know the best part of this news? They have somehow been able to keep the name of this coin out of the public. Only a very small select few “in the know” have caught wind of the name of the coin, and all they have to go by are rumors. Just based on these rumors alone the price of this coin has gone up 700%. Once that news becomes official and public knowledge, the price will go over the moon. Consider yourself very fortunate for landing on this page, because Kryptonex Research Group has been chosen by Sweden as their firm of choice for promotion and selling of this coin.
Because of this, Kryptonex Research Groub is the only group to currently have access to the name of Swedens official coin. We’ve signed a large non-disclosure agreement and are only able to reveal the name of that coin to our customers. That’s right, all customers of Kryptonex Research Group are given the name of Sweden’s coin before the general public has any idea what that coin is. The value of this can’t be overstated, as this coin will certainly moon in the long term as well as the short term. Kryptonex Research Group’s customers will have the ability to buy the coin while it is still incredibly cheap and undervalued and before the incredible spike in price this coin is sure to make once the name of the coin is released to the general news cycle. We’ve been informed by Sweden that they will be issuing a press release revealing the name of their official coin within days. At that point this video will be taken down and we will have to shut our doors to new customers and focus our efforts on our current ones while the frenzy over this coin ensues. If you’d like to get access to Sweden’s coin then become a customer of Kryptonex Research Group while you still can. Simply fill in the form on this page and one of our friendly agents will contact you through the next steps.
So there are a few things I would like to point out regarding the text.
- It creates urgency.
- It makes you feel like you’re in on a secret.
- It seems like this Kryptonex Research Group must be trustworthy since the government of Sweden trusts them.
- It promises great returns.
- It’s all complete and utter nonsense.
Let me be the one to tell you the name of the Sweden coin. I didn’t have to sign any non-disclosure agreements, I simply had to Google it. Taddaaaaa: E-Krona. It’s really creative.
You can find an official statement from Swedish Bank Riksbank here.
So we just destroyed all credibility that this video is claiming to have. Apart from the name of the coin being out there already more statements make no sense:
- Why would Sweden name a certain coin as their official coin? It makes no sense for a government to accept a cryptocurrency that someone else created as their own “national” cryptocurrency. These days it’s quite simple to create a new cryptocurrency, so why would they not just make their own like Venezuela did with the Petro?
- Why should a coin with the intended purpose of being used as a means of payment in one country make the price skyrocket?
- Why would Sweden charge another company with the promotion and sale of that coin? This sentence is by the way in direct contradiction to Sweden backing a new and emerging cryptocurrency. They can either use an existing cryptocurrency which won’t be their to sell or make their own.
- Have you ever signed a non-disclosure agreement? I have… It certainly doesn’t allow you to tell the whole internet what’s inside. Everyone can sign up for their website.
So to sum up my thoughts about the video. The video is quite nicely done, but pretty much each sentence is a lie. I’m no psychologist but I assume that it is also well made from a psychological perspective. There is a great sense of urgency to not miss out on this opportunity, or in the language of cryptocurrency huge FOMO is being spread.
6. The Counter
At the bottom of the page there is a counter:
The Red Flags on Google
7. Fake News
Interestingly enough one of the first hits when using Google to search for “Sweden official Cryptocurrency” is an article about how to invest in Sweden’s coin with kryptonexlabs. by diasporareporters. The entire post is a How-to guide explaining how you can easily invest. If at this point you want to have a good laugh feel free to read the article.
At this point I didn’t investigate diasporareporters further, but it seems like a very untrustworthy site to me. I assume they got paid to publish the article.
8. The Company Name
So we first get a hit on the dubious article mentioned above and then we get hits from a Block Research Group at ETH Zürich. So not finding the company name or research group name on Google is not a real confidence booster.
Miscallaneous Red Flags
9. No Information about the Coin
We don’t really know anything about this cryptocurrency. What are its features that set it apart from other cryptocurrencies. What problem is supposed to get solved? Usually new cryptocurrencies will have whitepaper which describes the technical details of their new cryptocurrency. (Note: It’s also possible to fake a whitepaper).
At this point we went a step further and signed up.
10. Signing Up Issues
While not necessarily a red flag it’s certainly not ideal that you can’t type special characters in your password. Additionally I wasn’t able to type any ü, ö or ä while filling in my name. But the really bad part started when I got the confirmation email for signing up.
When you fill in your form in Firefox you also get warned about the unsecure connection you have. So your contact details get sent in plaintext to the website, meaning that they are not encrypted. The reason for this is explained in point 1.
11. Plaintext Password
I seriously got my password in plaintext for a financial application. This means they actually know my password since they store it in plaintext on their database. This is totally unsecure. Even if for some reason the website were legitimate this allows hackers to easily gain access to my data. (Update 20th of March 2018: I actually tried to change my password and it is impossible to do so. The form is there but it isn’t functional.)
After signing up it only took 2 minutes until my phone rang and a friendly was on the other line… I’ll write all about this phone call in a second post.
In the following we’ll give a quick summary of some of the warning signs that a website might not be legitimate.
Warning Sign Summary Part I
- Browser says that a website is not secure.
- Too good to be true celebrity endorsements.
- Promise of high profits.
- Feature Buzzwords that sound more awesome than they are.
- Being urged to do something now because the opportunity will pass.
- Weird numbers such as fake counters.
- Fake Articles endorsing the website / cryptocurrency / ico.
- Google doesn’t find the company or people behind the website.
- No Whitepaper
- Weird Signup Form
- Passwords that get sent in plaintext without any security
Click here for Part II of the story.