Finacoin's discovery is that the airline industry currently suffers from a non-trivial level of fraud, buying up tickets with fake credentials or failing to send in payments. Finacoin believes it has a strong use case for a dedicated blockchain and a distributed ledger, where the airline industry would be able to perform global checks for payments and the validity of all tickets issued and spots sold.
The promises of Finacoin are big, verging on pompous. At the very least however, this project proposes a real use case for the flight industry. And curiously, Finacoin saw a promotion from none other than John McAfee. To be fair, I like that he's featuring different ICOs to spread awareness. He says very clearly that these are not coins he recommends to buy – just coins that are interesting to research and learn about (buy at your own risk).
2nd ICO this week: FINA coin. It eliminates fraud in the maritime and aviation industries – now costing in excess of $1 Billion/year. It is also is the first coin to combat terrorism and human trafficking – my hot buttons. This one is unique and stellar. https://t.co/cWU6KJzKmw
— John McAfee (@officialmcafee) January 5, 2018
Shortly after this announcement, things unraveled for Finacoin, making it an untouchable digital asset. Unfortunately, Finacoin ICO turned out to be a scam, which took in funds in Ethereum and disappeared from the radar.
— whatevermate (@designmcc) January 25, 2018
Table of Contents
What is Finacoin?
- Finacoin White Paper
- Country of origin: Nigeria
- Ticker: FINA
- ICO Dates: Closed January 18
- Hard Cap: Unknown
- Funds raised: Unknown
- Industry: Airline Booking
- Funds accepted: Ethereum
- My Rating: 0/5
Finacoin Social Media
Finacoin became prominent in January, as a previously unannounced ICO that gained sudden fame through a promotion from John McAfee. The maverick security expert has been, for a while, one of the most influential voices of the crypto community – so this ICO, which was otherwise rather obscure, was suddenly seen as a sure-fire way to score one of the smarter, more successful ICOs.
McAfee has been both wrong and right in the past, at one point leading coins to appreciate 1000-fold, as in the case of Verge. At other times, recent ICOs mentioned by McAfee, like Electroneum, failed to rise fast enough, due to inaccessible trading.
But Finacoin was one ICO where the security expert must have been impressed by the idea, overlooking general due diligence, and falling for a scammer.
The Finacoin Team: Anonymous, Possibly Fake
The Finacoin team was intentionally anonymous. The site's description mentions a network of experts but fails to give names. And what is more worrying, among the credentials are “MLM expertise”, a dubious merit when it comes to running an ICO.
But the person behind the ICO is one “Ebi Dominik”, a known Nigerian scammer, who has other crypto-related domains to his name, and possibly other scam projects.
Investing in Finacoin: The Risks
Potential investors in Finacoin were told to participate in the ICO in increments of $200, sent over in cryptocurrency. Unfortunately, at this point, it appears that backers have lost everything they invested.
Even initially, it was quite unclear how the FINA token would come into the hands of the airline industry, when the token sale was mostly marketed to small-scale investors.
Built-In Ponzi Scheme
Before Finacoin fizzled out, the white paper revealed that the token would have a very curious function. The token sale was built in a way that early ICO buyers bought the token for much less BTC. Newcomers had a more expensive entry.
Finacoin had the intention of building an internal exchange for trading FINA tokens against BTC – which would have been a mechanism for early buyers to sell their holdings to naive newcomers, in what would have been a Ponzi scheme.
Additional Security Risks
The Finacoin ecosystem required a registration, which itself would have been a security risk, as some saw passwords being sent insecurely. So simply registering for the token sale may have cost investors with exposure.
Exposed ICOs have seen additional phishing fraud, as well as compromised accounts. This has affected projects like Electroneum, and Experty, with various techniques of stealing accounts and emails.
Scam ICOs are the Trend
The ICO format turned out to be a great vehicle for scams. Until now, the ICO sector had seen some weak projects that could hardly manage to build a product. But outright scams were few and far between.
Now, scam ICOs are becoming a more common occurrence, as teams disappear with funds. The latest tweet from Finacoin asks for patience:
We Thank our Investors for their Patience so far. We would be listing on Exchanges pretty soon and would update our investors on the official listing date.
We would also be launching our Mobile Wallet App for Android.
Thank You for Believing in the Finacoin Vision#finacoin pic.twitter.com/gp3o3ZFDXd
— Finacoin (@finacoin) January 24, 2018
How long it would take backers to be patient is anyone's guess.
As for John McAfee, he has withdrawn his support:
I have been presented with evidence that the FINA ICO was organized by an individual associated with a known Nigerian criminal organization. I have no proof that they will not follow through and list the coins or develop a product, but I must withdraw my support. Details coming.
— John McAfee (@officialmcafee) January 10, 2018
Until the very last, the ICO social media denied the fraud allegations, and yet the project is yet to materialize, or give further proof it was legitimate.
One of the first ICOs that took off without prior notice was Confido. The curious thing is, its token had started trading, and still trades. In a few dramatic hours, the token had wiped out 99% of its value.
Other more recent ICO scams include Benebit, an overhyped project that shut down after gathering $2.7 million. The ICO was still running and raising funds, when some of the profile pictures on the project page turned out to be stolen from other people's profiles.
Final Words on Finacoin ICO
Finacoin ICO was promoted, but outside the usual ICO channels. The token sale was not listed on any of the better-quality rosters, nor did it receive any scrutiny from specialized reviewers. It is best to be wary of a hot project being pushed aggressively.
For this project, which turned out to be a scam with a built-in Ponzi scheme similar to BitConnect, My rating is 0/5. The coin may never appear on the secondary markets, but buying it would be as absurd as investing in the Confido coin. There are exchanges that will list any coin at all, but this does not mean the asset would be worth anything, or the product would materialize at all.
In 2018, the world of ICOs is becoming even more aggressive in terms of promotion, and projects are wrestling to gather up valuable digital assets. While it is exciting to discover an outlier ICO with a truly original idea, beyond the sometimes repetitive projects of mainstream ICOs, it is best to stay safe and keep in mind that even the best-rated ICOs of last year are yet to release a beta of their product.
In the case of Finacoin, the failure of the project is, in fact, a blessing in disguise, as a successful project would also mean another pyramid-style fraud.