6 ms·

Israel’s most-hyped initial coin offerings were scams, ex-employees allege

54 points by Ozzie_osman 5y ago

eschaton 5y ago
How is this news? They were cryptocurrencies, of course they were scams.
- helloworld11 5y ago
  Pray tell, in what way are bitcoin, or ether for example, or several other major currencies without central control scams as designed? Or hell, even dogecoin, whose creator explicitly, openly created as a joke, without ever having control of its later price rises. I know this site is militantly anti-cryptocurrency much of the time but some of these comments like yours just delve into the idiotically, crudely simplistic in their dismissiveness.
  - ostenning 5y ago
    Agreed with the anti crypto sentiment on hn. Not unjustifiable though - the space is actually filled with scams
    - krageon 5y ago
      It absolutely is, but claiming every single entity in the space is a scam (as the root post is doing) is disingenuous and doesn't help anyone.
      - decremental 5y ago
        Well, it certainly doesn't help anyone who has sank money into crypto. Whether it hurts anyone who hasn't or might be tempted to is a different matter.
        krageon 5y ago
        Perhaps you feel like speaking an outright lie to "protect" folks is totally fine, but I do not. We're just going to have to disagree.
      - ostenning 5y ago
        True, I think there are some promising aspects to crypto, once you weed out the get rich quick scams and the crypto bros
  - Traubenfuchs 5y ago
    All crypto is controlled by a handful of unknown and known (Elon Musk) actors. They make a tons of money. Some lucky investors make a lot of money. A lot of idiots get burned. Those "currencies" you named are not used as currencies by anyone, but simply as a) investment or b) way to scam others out of their money.
- TheGigaChad 5y ago
  No Coiner detected.
- jl2718 5y ago
  Cryptocurrencies feed on a cycle of fear and greed and deceit. The technology exists because people are scared of inflation and authoritarianism. Then there are ‘investors’ who see this fear as a trend that can be exploited for profit. Then there are the scammers who target the greedy. And then the authoritarians step in and stoke more fears while mostly failing to do anything about the scams. But it starts with that fear, and it would end if people weren’t scared. The scams are just a byproduct, and this happened in every major financial revolution. My favorite example is the financial history of the collapse of the French monarchy. Maybe there will be enduring fiction written about cryptocurrency scammers with personifications like “The Merchant of Venice”.
- eschaton 5y ago
  People wondering why I say this need to read “The Politics of Bitcoin: Software as Right-Wing Extremism” by David Golumbia and “Attack of the 50 Foot Blockchain” by David Gerard. This stuff is based on crackpot economics so it’s inherently a scam.
amitport 5y ago
This is not so much about crypto as it is about Moshe Hogeg. It is being alleged that he started various investor frauds, these companies are just a subset. In general, allegedly, he raises money for an idea... takes that money into raising money for the next idea... and so on. Only a small proportion goes into actual development, the rest seems to be spent on "consulting" and such. Also note that these currencies are really not Israel's most hyped anything. That's just the author's way of sprinkling some anti-Israeli spice. You don't see articles about (some obscure crypto nobody heard of) starting with "US's most hyped ....". Even when it's not obscure, you don't see Dogecoin articles start with such a sentence. It is irrelevant and incorrect.
- jl2718 5y ago
  I can’t understand why Doge is the brunt of all cryptocurrency criticism. It is fair to call it a joke, but it’s very different to call it a scam. First, there was no genesis allocation. Second, the creator didn’t even mine at all (well, I guess we don’t know). Third, there was no promise made that it would do anything it didn’t do at genesis, and even then it was one of the fastest adopters of what was considered new technology at the time. A scam would involve a genesis allocation to the founder/promoter, tax or staking rewards to them, aggressive early mining, promises that it would do something that it didn’t do, aggressive promotion to investors at inflated prices, minimal investment of founder rewards into development, and personal use of funds raised. That describes almost every major crypto project, including Doge because of large early rewards, but far less than almost anything else, and that was somewhat mitigated by constant inflation. It may also be fair to say that Doge was hijacked by just a few miners or wallet scammers on Reddit, or social media personalities. There are big problems with its distribution like any other crypto. Maybe your concerns are warranted, but if so, you should take a hard look at every other crypto, or startup, or stock.
  - amitport 5y ago
    Hmmm I didn't mean to call doge a scam... It just an example of the common case where you shouldn't attribute specific cryptocurrency hype to a country. (And I didn't mean that hyped is necessarily a scam.)

54 points by Ozzie_osman 5y ago

eschaton 5y ago

How is this news? They were cryptocurrencies, of course they were scams.

helloworld11 5y ago
Pray tell, in what way are bitcoin, or ether for example, or several other major currencies without central control scams as designed? Or hell, even dogecoin, whose creator explicitly, openly created as a joke, without ever having control of its later price rises. I know this site is militantly anti-cryptocurrency much of the time but some of these comments like yours just delve into the idiotically, crudely simplistic in their dismissiveness.
- ostenning 5y ago
  Agreed with the anti crypto sentiment on hn. Not unjustifiable though - the space is actually filled with scams
  - krageon 5y ago
    It absolutely is, but claiming every single entity in the space is a scam (as the root post is doing) is disingenuous and doesn't help anyone.
    - decremental 5y ago
      Well, it certainly doesn't help anyone who has sank money into crypto. Whether it hurts anyone who hasn't or might be tempted to is a different matter.
      - krageon 5y ago
        Perhaps you feel like speaking an outright lie to "protect" folks is totally fine, but I do not. We're just going to have to disagree.
    - ostenning 5y ago
      True, I think there are some promising aspects to crypto, once you weed out the get rich quick scams and the crypto bros
- Traubenfuchs 5y ago
  All crypto is controlled by a handful of unknown and known (Elon Musk) actors. They make a tons of money. Some lucky investors make a lot of money. A lot of idiots get burned. Those "currencies" you named are not used as currencies by anyone, but simply as a) investment or b) way to scam others out of their money.
TheGigaChad 5y ago
No Coiner detected.
jl2718 5y ago
Cryptocurrencies feed on a cycle of fear and greed and deceit. The technology exists because people are scared of inflation and authoritarianism. Then there are ‘investors’ who see this fear as a trend that can be exploited for profit. Then there are the scammers who target the greedy. And then the authoritarians step in and stoke more fears while mostly failing to do anything about the scams. But it starts with that fear, and it would end if people weren’t scared. The scams are just a byproduct, and this happened in every major financial revolution. My favorite example is the financial history of the collapse of the French monarchy. Maybe there will be enduring fiction written about cryptocurrency scammers with personifications like “The Merchant of Venice”.
eschaton 5y ago
People wondering why I say this need to read “The Politics of Bitcoin: Software as Right-Wing Extremism” by David Golumbia and “Attack of the 50 Foot Blockchain” by David Gerard. This stuff is based on crackpot economics so it’s inherently a scam.

amitport 5y ago

This is not so much about crypto as it is about Moshe Hogeg. It is being alleged that he started various investor frauds, these companies are just a subset. In general, allegedly, he raises money for an idea... takes that money into raising money for the next idea... and so on. Only a small proportion goes into actual development, the rest seems to be spent on "consulting" and such. Also note that these currencies are really not Israel's most hyped anything. That's just the author's way of sprinkling some anti-Israeli spice. You don't see articles about (some obscure crypto nobody heard of) starting with "US's most hyped ....". Even when it's not obscure, you don't see Dogecoin articles start with such a sentence. It is irrelevant and incorrect.

jl2718 5y ago
I can’t understand why Doge is the brunt of all cryptocurrency criticism. It is fair to call it a joke, but it’s very different to call it a scam. First, there was no genesis allocation. Second, the creator didn’t even mine at all (well, I guess we don’t know). Third, there was no promise made that it would do anything it didn’t do at genesis, and even then it was one of the fastest adopters of what was considered new technology at the time. A scam would involve a genesis allocation to the founder/promoter, tax or staking rewards to them, aggressive early mining, promises that it would do something that it didn’t do, aggressive promotion to investors at inflated prices, minimal investment of founder rewards into development, and personal use of funds raised. That describes almost every major crypto project, including Doge because of large early rewards, but far less than almost anything else, and that was somewhat mitigated by constant inflation. It may also be fair to say that Doge was hijacked by just a few miners or wallet scammers on Reddit, or social media personalities. There are big problems with its distribution like any other crypto. Maybe your concerns are warranted, but if so, you should take a hard look at every other crypto, or startup, or stock.
- amitport 5y ago
  Hmmm I didn't mean to call doge a scam... It just an example of the common case where you shouldn't attribute specific cryptocurrency hype to a country. (And I didn't mean that hyped is necessarily a scam.)