learn crypto

Bitcoin, Blockchain,


News, Events, Meetups

wendys whitepaper logo

How The Fake ICO Works

fake ico its a trap

A story from the ghost of crypto past about scammers, manipulators, the playwrights, poets, and actors of the Fake ICO!

(Not) All Doges Go to Heaven, Part Two – The Shibbening

Hi, folks. Sherpa here again with a break from the NFT dabbling I’ve done in recent weeks, to bring you another story from the ghost of crypto past. If you’re a subscriber, you might remember part one of this series where I discussed Wolong and their “Game of Deception” reveal on early Doge market manipulation. I love these stories, because crypto is a place where something new, exciting, and a little bit insane happens almost every single day – but with news coming at you so quickly, we can forget that even “new & crazy” on the bleeding edge of tech has its origin stories & mythical figures.

If you ever want to dive into the history, it’s as easy as searching BitcoinTalk for early figures like Hal Finney or satoshi and digging into their thread & comment history. You quickly begin to develop a picture of the early, collaborative nature of the community. Where any one comment or thought could spark the next big thing, or inspire developers to build something new & exciting.

fake ico bitcointalk

But that isn’t what I’m discussing today. Today we’re going to take a look at The Story of Bob Surplus by BitcoinTalk user The Sound and Fury. Unlike “The Game of Deception”, Bob’s story is written almost as a play, with a writing style that makes you imagine a “cryptocurrency Hamlet”, with subterfuge & hidden daggers abounding, throughout. I won’t post the full text here, because it runs a bit long & I’ve already linked it (above) – but as someone who enjoys writing, this tale is delightfully well-written & a must for anyone new to trading in cryptocurrency markets.

the fake ico by hamlet
This, but with a QR code.

It tells the story of an underground group that started as most “paid groups” do, today: with a “game of deception” relying heavily on timed calls, gradual selling off, and self-fulfilling public prophecies. This is how these folks build their reputation. It always starts with a core group, often with various skill sets & levels of capital. These groups can, and often do, make their members money. It isn’t hard when you control the game while most of the market doesn’t even know the rules. If the story ended there, it would be one among thousands. But Bob went further. The story begins to reach its climax as the group brainstormed turning an existing dumpster fire of a coin project into their own fake ICO launch. The downward spiral that follows is one for the history books, but it is a model used & refined by bad actors & cash-grabbers ever since.

Related: Metamask Wallet Safety

This is how a Fake ICO works:

The foot soldiers commit to buying a certain amount of the coin during the ICO. The leaders get 100% of the BTC generated from the ICO back, and refund the foot soldiers what they bought, without taking back the coins involved. This means the soldiers can sell these coins later at any price above 1 satoshi – and it is all pure profit, since they got their original BTC back already.

Of course fig leafs are needed for such a play. Large chunks of ICO are set aside for “marketing” and “development”. Conveniently, it is the ICO leaders who control these addresses.

One would think this sort of thing would eventually boomerang back on the leaders. And usually it does. But only for awhile. Because after the FUD subsides, the only people left in the coin are those who are “investors” and “believers”. And for very different reasons, these stakeholders have no interest in seeing truth emerge.

Investors don’t want to demand truth and accountability. That would tank the price forever and they would never be able to realize any gain, or even get out alive.

The believers are a species unto themselves. They develop a cult-like devotion to the coin and its supposed technology, blocking out all reasonable outside voices. They cultivate a devotion to the leader of the coin – usually the dev – and join with him in his messianic complex, which is defined roughly like this: Coin “X” is going to change the world, and the world doesn’t want that to happen. Paid forces are out to get the leader, and we must circle around him.

If it all gets too much, the leaders of the coin just remove it from the public eye. They retreat to a private forum or bb, where only the voices of the leader and followers can be heard.

That is how a fake ICO works. This is how little BitSwift came into this world.

Does that sound the least bit familiar to you? If it doesn’t, you may be new to the space. If it does, realize that this is a playbook, much like Wolong’s, that was written long before most of us started trading in the space. There’s a bit of truth in the mouth of every liar, though. One thing Bob said, often, that bears repeating: Be sure to take profits every day. Having targets is fine. Being enthusiastic about the tech is fine. But at a certain point that begins to degrade as sunk-cost fallacy sets in, and your initiation into the inner workings of the “cult” isn’t far-off from there.

Until next time, this has been Sherpa for Wendy’s Whitepaper – take profits every day, and don’t drink the kool-aid.

Related: Fundamental Health Part Four – Scams, Hacks, and Hoodwinks!


  • Torrent/seedbox aficionado, decentralist, cultural archivist, fundamental analyst, podcast addict, shitcoin-sifter extraordinaire
    Tip Jar
    BTC:  bc1qahxrp47hpguhx8y8r382dekgca34tlv54aufht
    Doge: DJRy9gGSUGeyXfVcZXzKLkBv7RmDLv3MhJ

Share This Article

Join 10,000+ forward thinkers! Get crypto education in your inbox.