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Want To Make Millions? Copy Someone’s Cryptocurrency Project.

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BuzzFeed News; Getty Images

In late January, Patientory, a software firm that aims to store electronic medical records using a distributed database, caught wind of a worrying development. The Atlanta startup, which had raised more than $7 million from investors, noticed that a proposal outlining its proprietary technology and company vision — better known in the cryptocurrency world as a “white paper” — was also being used to raise money by an unknown company called Dentalfix.

Dentalfix’s origins are unclear, but it appears to have been a Russia-based seller of tooth repair kits that at some point in recent months decided it could raise money by selling its own cryptocurrency. After one initial coin offering (ICO) failed, the company unveiled a new website and business plan in late 2017 for a “health management system,” complete with an impressive looking white paper with full pages of text lifted from Patientory’s plan.

“We’d like to inform the community that we have no affiliation with the company, Dentalfix,” Patientory tweeted to its followers on Jan. 23. “The Patientory team was recently notified that Dentalfix is attempting to pass off our whitepaper as their own. We don’t encourage or support plagiarism in any form.” Dentalfix did not respond to requests for comment.

Dentalfix failed to gain traction with potential backers, but its blatant cribbing of intellectual property is yet another example of bad actors searching for ways to fleece investors in the fledgling and largely unregulated cryptocurrency market. At a time when a startup with no working product can raise millions of dollars on little more than the seed of an idea, shady companies with flashy websites and questionable white papers are looking to take advantage of unsophisticated investors who might not be able to tell the difference between what’s real and what’s not.

That practice may not go unnoticed. The Securities and Exchange Commission reportedly launched a probe last month into dozens of companies and advisers involved with ICOs to examine the way cryptocurrency firms are marketing and selling digital coins. As part of that process, the agency may take a closer look at white papers, which began as documents to explain a project’s concept and technical merits, but have since been used to set business milestones and, sometimes, financial expectations.

A spokesperson for the SEC declined to comment or even confirm the ongoing investigation.

“The crypto community has turned into a version of LA, where everyone is going around with a script in their hand trying to pitch a movie.”

In an industry in which most cryptocurrency companies do not have a working product before they try to raise capital, a white paper may be one of the few pieces of information that developers or investors can use to evaluate the viability of a project. The most widely known white paper, Satoshi Nakamoto’s explainer on Bitcoin, conceptualized a “peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution.” (That nine-page document made no attempt to speculate on the crazy valuations that have come to define current Bitcoin mania.)

“I read the white paper typically fairly early on to see if it’s something I’d be interested in, and to see what design flaws they actually have,” Arianna Simpson, a managing partner at venture capital fund Autonomous Ventures, told BuzzFeed News.

The problem, however, according to Simpson is that with a lot of startups shilling their new coins, it’s become “hard to differentiate who is serious and who is not.” Advisory companies and even contract workers on freelance sites like Upwork and Fiverr offer services to compose white papers, while the fast-moving, speculative nature of cryptocurrency — and the fact that pretty much anyone with a bank account can invest — suggests that fewer people are evaluating them on their technical merits or even reading their white papers.

“The crypto community has turned into a version of LA, where everyone is going around with a script in their hand trying to pitch a movie,” Emin Gün Sirer, an associate professor in Cornell’s computer science department, told BuzzFeed News. The amount of interest and money to be made has incentivized bad actors, he added, pointing to the “abject plagiarism” of Tron, a cryptocurrency that currently has a market capitalization of $2.3 billion according to, despite being accused of copying another company’s work.

A previous version of Justin Sun’s bio from the Tron website listed that he was a protégé of Alibaba CEO Jack Ma. After BuzzFeed News contacted Sun for this story, the website was changed and that mention was removed.

In January, Juan Benet, an entrepreneur behind Filecoin, a data storage network with an application token that raised $257 million, claimed that the Tron white paper included language from his proposal and others with “zero references.” He included a diagram showing material he alleged had been copied. Tron’s creator Justin Sun, a Chinese entrepreneur who claims to be a protégé of Alibaba CEO Jack Ma, replied insisting that the similarities between the two papers were the result of a translation issue. Tron, which says it’s constructing “a global free content entertainment system utilizing blockchain technology” subsequently scrubbed its website of the original white paper and uploaded a new one — but not before its market capitalization rapidly dropped from its height of $12 billion.

To evaluate the accusations against Tron, BuzzFeed News asked Quetext, a plagiarism analysis company, to compare Tron and Filecoin’s white papers. Quetext assigned a similarity score of more than 15%, and highlighted whole diagrams, passages, and chunks of phrases that were shared between the two. (For comparison, Dentalfix’s white paper had a 99.9% similarity score to Patientory’s.)

BuzzFeed News; Source: quetext analysis

BuzzFeed News; Source: quetext analysis

Benet did not respond to multiple requests for comment. Sun, who often tweets about his company’s close ties to Alibaba and does little to dispel rumors that Tron might partner with e-commerce behemoth, didn’t respond to requests for comment, either. A source close to Alibaba told BuzzFeed News that the e-commerce giant has no plans to work with the cryptocurrency company and that Ma has no protégés. (After BuzzFeed News reached out to Sun with questions about his relationship with Ma, references to the Alibaba CEO disappeared from the Tron website.)

“Tron is a befuddling and concerning case,” said venture capitalist Chris Burniske about its market capitalization, which places it among the top 15 most valuable digital tokens. “The people behind the currency incessantly promote exchange listings, emphasize partnerships, and otherwise use flashy techniques to induce, enable, and sustain irrational exuberance.”

While Tron’s price has dropped from the dizzying prices of January, it’s unclear how much longer it can sustain that exuberance without launching a product.

While some seasoned investors and cryptocurrency veterans scratch their heads about Tron, many see it as the exception and not the rule. Ryan Selkis, the CEO of Messari, a company attempting to build a database for standardized information about digital coins, noted that communities on Twitter and Reddit have done decent jobs ferreting out examples of blatant scams and copied white papers, preventing bad actors from getting too far.

That’s what happened with DADI, “a decentralized cloud computing company,” whose January token sale was called into question when users on Twitter began comparing passages of its proposal to that of a Russian company called SONM. In response, DADI decided to come clean in a blog post.

@windcarfare @chrismair @VitalikButerin
Haha, this retweet didn’t age well…

#DADI #SONM #Plagiarism

“Yes, the copy in section 3.6.4 of our white paper is a mistake… but it’s one page out of 70 —  [300] words out of 11,758,” the company wrote, before pulling its original white paper and uploading a new version. “The words in dispute were left in the document from earlier research material and should have been edited out: the details provided were not representative of the current state of network development.”

Some investors would go on to believe them. DADI raised the equivalent of about $28 million from its ICO sale that finished at the end of January. It remains to be seen if any of that will go toward the development of a working product. DADI CEO Joseph Denne did not respond to an emailed request for comment.

“Plagiarism is indicative that there is something fishy going on,” said Jerry Brito, the executive director of Coin Center, a Washington-based cryptocurrency lobbying group. “There are 1,500 tokens that I’ve seen and for a large percentage of those, I can’t justify why they have any value. At some point reality is going to catch up.” ●

Charlie Warzel contributed additional reporting to this story.

Ryan Mac is a senior technology reporter for BuzzFeed News and is based in San Francisco. He reports on the intersection of money, technology and power.

Contact Ryan Mac at

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