Exposing CryptoScams, Part One
A Weekly Series Examining ScamCoin Projects and Their Effects on The Rest of the Blockchain Experience
W. Paul Alexander
for Better Call Paul Blog
Published Originally on Publish0x on Jan 11, 2020 by WPA and reproduced by the author on other platforms, including but not limited to Steem and Sapien.
Thank you for reading. Scams in society in general have a tremendous effect on economies worldwide. After witnessing some of the blatant fraud that goes on in any unregulated industry, specifically these "better-than-good" crypto projects that promise untold wealth for little to no effort whatsoever. While there are literally billions -- even trillions -- of US Dollar-equivalent riches to be gained by players in the cryptosphere; 99% of these yet-to-be-awarded riches only come to those who have worked hard to establish themselves in the world of blockchain who have put in countless hours to bring their projects to fruition.
Now, it is certainly possible for someone to make a large return off of a very, very small initial investment through the crypto-trading world -- as a matter of fact, I've done it. However, while it appeared as though the small investment was the only thing the made my large return come true, the truth of the matter was that I was able to take my compensation for working on the founding of the Rupee Blockchain project and trade it during the ICO bubble of 2017 and made a total return of $750,000 USD off of a zero-dollar investment (not including my labor working on the project, which probably accountED for about 20,000 USD.
This is RARE. Any time you see a project promising extremely high yield like this (They call these HYIPs, or "high-yield investment platforms"), do intense and copious research on your own before you EVER invest in one of these. Before you give your money to any project like this, ensure that you are able to connect with a REAL user on the platform that has received their promised returns. If you cannot verify by reaching out to users of the platform, run away. If it seems too good to be true, run away.
I have thus decided to start a weekly article in which I explain some of the active cryptoscams out there and expose them for the liars and cheats that they are.
This week, I will be explaining the scam that calls itself "Empowr".
What is Empowr?
Empowr is supposed to be a "democratically" run social media network where members, who Empowr calls "citizens," are able to post items for sale, trade, barter, and even make a solid passive income simply by posting well put-together content. Most people active on the site speak in broken English and they almost never give relevant feedback to anything. From the very get-go, something felt fishy about it. I had never even heard of the project before, until one day in late 2017, I received a telephone call...
It was about a year and a half ago, and my 69-year-old mother who had been using a PC at that for about 6 months, gives me a call and tells me that she has found a source of online income for herself, and she wanted me to take a look at to see if it sounded legit. I have been a freelance paralegal, content creator, and successful entrepreneur; so I have become the "it person" to come to in both my neighborhood and within my own family for anyone considering making the leap from employee to business owner. Anyway, I immediately was able to ascertain that the Empowr project was a scam. They told her that she had made $17,000, and she was so excited. She just needed a Paypal account in order to withdraw her funds and she was good to go. Except, no payment ever came.
Come to find out, she had been spending close to 30 hours a week -- the threshold that separates part-time from full-time for sake of health-care coverage in the United States -- for the previous 3-4 months, writing voluminous, thoughtful, and flat-out excellent posts on the Empowr platform day-in, day-out. Her stats on the homepage eventually said that she had earned over 30,000 USD. At this point, I told her straight up that it was a scam and to leave it alone, but she had invested a ton of work and put her soul into the content she was posting. I told her to put it out there to the "community" and make a post flat out asking if anyone had ever received their money from Empowr. She never found anyone who gave an answer to the questions, but soon after, Empowr announces that, instead of the 32,000 USD she had in her account, they were switching over to paying contributors in their new, shiny ERC-20 token.
Well, this would have been fine, had they been given the choice to do so. However, that 32,000 USD that my mother was told she had already made should have never had anything to do with the Empowr crypto. It was earned long before the Empowr token came into existence, and as such, should have been paid out using Paypal via a USD transaction the way that it was promised in the beginning.
Then, after the people behind Empowr had their pump-n-dump ICO, the token saw a very slight increase in price. However, in order to withdraw the token, you had to send ETH to cover "transaction fees" akin to Eth gas price, but much more than the actual gas price cost itself. So, my mom finally got out before she gave them any of her hard-earned retirement funds, thankfully, because she could not figure out MetaMask.
The Saga Continues and the Fraud is Uncovered
So, as you can imagine, people started to get very pissed off. During the ICO, the creators of the project made a promise to the community that there would never be more than 10 billion Empowr tokens created. However, not long after that, they decided to break that promise and flooded the platform with billions upon billions of tokens.
...and what happens when a centralized issuing authority starts increasing the monetary supply in any given economy? It doesn't matter if it's 1920's Weimar Germany or 2020's blockchain economies -- when the money supply is arbitrarily increased by someone controlling the levers, hyperinflation is the result. This is exactly what happened with Empowr.
To give you an idea of how bad it had become -- during the time that my mom was involved with them, I created an account in order to check out the site and evaluate it for credibility. One log in, no activities, no pages viewed, no connections made. Yet, regardless of this, each morning I receive an email from Empowr telling me that I have in excess of 18 million of their coins. Of course, I cannot access them, and when you try to go to Empowr's homepage, you are greeted with a message telling you that the previous iteration, which they call an "Open Alpha Test" was being completely shut down in order to "make room for the Beta phase."
Anyone who knows anything about software development understands that the process from alpha to beta to release is a cumulative process. The alpha version does not get completely scrapped to make way for the beta version. Sure, some features may not make it past Alpha to Beta and then to retail, but I have been in this industry a long time, and this just screams to be that they are about to disappear with everyone's money..
I don't even think those 18 million tokens would go as far as buying a McDouble from the McDonald 's value menu, much like the hyperinflation in Germany in the 1920s that saw people carrying wheelbarrows full of cash to buy a loaf of bread.
Now, if you try to access their homepage from any browser that has the Metamask extension installed, you will see the following warning and feedback from Etherscamdb.info -- which is a database that houses current information regarding suspected crypto scams. As you can see, the behavior that qualifies them as a scam is the fact that they literally require users to turn over their private keys, after which there are so, so many instances of complaints from their user base that describe a fraudulent company that debits the tokens held in the wallet for which the private keys were turned over.
It's bank fraud, plain and simple -- because even though the scammers behind Empowr may think that they are free and clear of bank fraud because there are no banks involved in the Empowr scam itself, they fail to realize that when they withdraw those fraudulently gained funds to their own fiat accounts, THAT is where the crime occurs. Add to that wire fraud, using a computer system to perpetrate fraud, etc., etc., etc., just like every other financial racketeering.
Category: Phishing - Empowr
Description: Asking for private keys that are sent to the backend with POST /FBBank/EthereumWalletEditor.aspx - deposit address (to buy their coins) 0x50fe59792a325084604a524a8f148de04182769a
MetaMask Status: Not Yet Blocked
Google Safe Browsing Status: Not Blocked Yet
VirusTotal Detections: Could not pull data from VirusTotal
Phishtank Detected: Could not pull data from Phishtank
Urlscan Scan Results: Link
pdns03.domaincontrol.com pdns04.domaincontrol.com Conclusion
Empowr is a scam, through and through. It has been exposed as such by many people who have fallen prey to their straight up criminal enterprise, and since I actually have a personal history with these people, I thought it would be a good idea to discuss them this week. The concept was actually decent, and some of the ideas put forth by Empowr are being used in new, legitimate projects, such as the Sapien Network. However, in the end, the people behind Empowr were nothing more than criminals, and by exploiting the buzz around the cryptocurrency world during the ICO bubble, were able to make millions for themselves by promising desperate people who cannot work for a living a chance to put together legitimate passive income. Instead, they are preyed upon by these vultures and are left with nothing but a massive loss.
If you've been dedicating time to crafting top-notch content to post onto Empowr, just walk away right now. Take the loss as it relates to the time you spent, but make a log of that time spent putting in hours and hours creating content for the Empowr scheme. The more people that come forward about this, the more likely it becomes that governmental agencies will step in and seize the site and shut down, while on the other hand, a nice attorney comes to the picnic and represents all of those who lost due to Empowr's scheming.
The only thing that is not good going forward is that they are not US-Based. If they were, the feds would've already put an end to this while our FTC would be taking the reins to get victims reimbursed for their losses.
There are some people that still defend Empowr as though they are making what they are being promised. I have a challenge to you all -- just show us all proof that you have received a legitimate payout from them, and I may be interested in taking another look -- but until someone demonstrates proof that the payments have occurred, Empowr will stay on my "scam" list.
Thanks for reading,
W. Paul Alexander