Dascoin: a pyramid-shaped blockchain
Coinhouse team – 12 Oct 2018
Lately, we’ve been approached at several occasions by people that were into DasCoin. Facing a growing demand and as we had never heard of it, Coinhouse decided to investigate. It didn’t take many clics to activate almost all of our red flags. Thus, we felt obliged to right up a warning article.
At first sight, when going over the official website, the asset seems to deserve its 1690th rank in terms of market capitalisation, and does not stand out from the hundreds of assets with these levels of valuation.
By going through the White Paper, the asset sells itself as an hybrid solution, working with consortium blockchain, and a rate of issuance of new coins that is controlled in a centralised manner. We already have a trust issue here regarding the transparency and long-term stability of the project. With a few exceptions of the likes of Ripple, most of the projects run on public, permissionless blockchains.
What truly instored distrust and suspicion on the project was the pushiness of the people involved in the project, who advised us into acquiring DasCoins. Nothing is free in the cryptoeconomy, which led us to think that they had something to win in return.
After some research, we saw that there is indeed a referral program that is described in the netleaders website, who sells DasCoin “licenses” which allow you to “generate” coins as time goes by.
Very suspicious of the system, Coinhouse tried really hard to give the benefit of the doubt to DasCoin. Indeed, dishonest people could be trying take profit on the back of the project, just as many scammers try to profit off of Bitcoin’s popularity and the lack of knowledge of new investors.
With this in mind, we contacted the team on Telegram, which confirmed the collaboration between DasCoin and Netleaders, a society that is in charge of DasCoin’s marketing:
At the same time, we’re contacted by private message by another administrator who takes the liberty to give us his referral link:
A multi-level marketing system
So, we are dealing with a multi-level marketing network, which is very close to a pyramid scheme. After a short research, we find numerous websites dedicated to sell DasCoins licences like:
Even though MLM are not illegal systems, they often are at the source of serious problems and does not constitute what we can call a good investment. You can read about MLM here: “Why Joining an MLM Will Ruin Your Life”.
DasCoin, like all MLMs, promises easy gains that rely on the arrival of new entrants to the system, which has to be more numerous as time passes.
The problem with MLM is that the marketing tends to be in charge of the participants, who are willing to disclose inaccurate information in order to onboard new people and make a profit.
For instance, DasCoin bragged about being available on the Ledger Nano S, claiming that Ledger had developed a specific version of the Nano S in limited series for the DasCoin project:
The image shown above clearly makes you think Ledger officially supports DasCoin. Which is not very honest, to say the least
As a matter of fact, Ledger allows companies to order Nano S at their brand image, which can be personalised and on top of which you can install applications as wanted. Ledger puts at disposal the necessary tools so any programmer can create a wallet app for his crypto asset. Ledger went out public to say it does not officially support DasCoin
As a conclusion, DasCoin doesn’t act illegally but shows off numerous unhealthy signs that can hurt inexperienced investors through an MLM approach. We advise our readers and clients not to get implicated in this type of projects as you will probably get burned.
October 6, 2018 update : In May 2018, Canadian authorities ordered DasCoin to stop all their activities in Canada. And more recently, Poland Justice department started a criminal investigation, suspecting DasCoin model to abuse its legislation.
October 29, 2018 update : The District Prosecutor’s Office in Warsaw (Poland) continued proceedings regarding DasCoin and confirmed that the project didn’t respect their legislation. More than $10 millions has been seized on the company’s account.DasCoin value was dropping quickly after this news was released.
Find sources below :
More than $10 million seized from DasCoin bank account
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