This is a story of a poorly executed ICO scam called Langpie. The Langpie pre-sale is planned for later today and the ICO is set for November 2017. As an editor in chief, I have a strong nose for BS. As anybody who has been in the Bitcoin space for awhile can tell you, this industry attracts the absolute worst BSers in the world. After being made aware of certain scammy aspects of this particular ICO, I had to take a deeper dive. I’ve read the Langpie “whitepaper” so you don’t have to, but I still recommend that you do just for a few laughs.
The Langpie ICO scam investigation
A few days ago, I stumbled upon a Hacker News post by a thoroughly flabbergasted developer – we’ll call him K at his request. He had noticed that his GitHub and other social media accounts, including his profile picture, were being used to promote an ICO. His HN post read:
“I just found out that somebody is using my picture, name and links to social networks in what seems to be an ICO scam website. They pretend to be a translation app on top of blockchain technology and listed me as part of the team working on the app which I am not. I am not sure what to do! Any ideas?”
I contacted him for more information – K emailed me quickly, and explained fully:
I was contacted by Nastya Moroz, also in the same team, on Facebook messenger at first she said that she have some questions about the blockchain. I thought it was strange that a random person is just reaching out to ask me about something I have very little knowledge about. So I was looking into her profile and that’s how I found the website.
Nastya Moroz, the supposed Project Manager for Langpie, reached out to their supposed blockchain developer, after already listing him on the site. The story gets more bizarre still:
“This person kept contacting me on messenger this time saying she have something important to talk about regarding her company, and when I faced her with the fact that they’re using my name and picture without my permission, she said it was a mistake and asked that I tell no body, probably to not mess with their ICO that starts in 2 days.”
The Langpie website no longer has K’s profile picture and social media links – they have been replaced with another person’s profile picture, Facebook and GitHub link. This new blockchain developer profile, along with Nastya Moroz’s profile, both claim to be a former employees of Open Solutions – a Russian tech consulting company. I think it’s safe to say that Langpie doesn’t have a blockchain developer, or any developer whatsoever.
Both Open Solutions and Langpie did not respond to requests for comments by the time of publication.
Signs you might be running an ICO scam
1. Your blockchain developer isn’t actually a blockchain developer
2. Your blockchain developer has no idea who the hell you are
3. You willfully confuse profit and revenue in your whitepaper
4. You don’t know what burning cryptocurrency means
6. Don’t Profit
Langpie is generating buzz on the promise of transforming the online translation industry. The same way that experts have pinned Bitcoin as a digital competitor to gold, and estimated that Bitcoin’s price would be $X if it could only hit Y% of the gold market cap, or the credit card fraud volume, or international trade flows, etc. The stated target industry for Langpie is the $1.713 billion over-the-phone interpreting market. Langpie promises that, with a heavy marketing campaign paid for by your funding, they’ll be able to capture 20% of that market by 2020. Starting off though, the Langpie whitepaper author claims:
“Our company expects to conquer and occupy about 10% of the market share by the end of 2019, the estimated profit will be 171 million US dollars of profit per year.”
Wait a minute, I thought your profits came from 5% commissions? And aren’t those commissions burned (technically having their value evenly distributed among the remaining coin holders, even those that didn’t participate in the transaction)? Wouldn’t Langpie’s profit, if they did even keep 5% of every successful Langpie smart contract transaction, be a lot smaller than $171 million? And jeez that sure sounds deflationary if 5% of every transaction gets burned – in the event that people actually use this scam coin, what happens to the supply?
In the infamous words of Billy Mayes: “But wait, there’s more!”
The whitepaper goes on to address this economic point…
“After several years, in case of insufficiency of tokens the system will generate new tokens which will be sold through the exchange market, 80% of the profit from that crowdsale would be distributed proportionally between the users, the rest of 20% would be spent on improvement of the system, equipment and for employment of additional staff.”
That’s right, they’re promising current pre-sale and ICO participants a chunk of their future crowdsale which will happen in several years. The money generated from the planned pre-sale and ICO are earmarked as such: 46% for marketing, 7% for tech infrastructure, and 15% for R&D – they clearly have their priorities straight, just check out their Bitcointalk thread and see the type of marketing they’re currently promoting. One big ICO scam sin is having bounty programs for publications to write about your ICO – and Langpie is no different. Langpie paid for press releases on several cryptocurrency news publications and claims on their website that they have received “coverage” by these sites. Langpie proudly displays them on their homepage with a simple message: “Press love us!” Let’s not get into the current sorry state of the digital currency media space, that such a project was able to gain any steam at all. Very technically, I could try and claim a chunk of the Langpie Blogs/Media promotion bounty with this article – not that I’m likely to ever get a response from this fake project.
The current effort, and planned future effort, is all for marketing and nothing for tech/dev. If the dev work on the translation app is completed, and that’s the reason why there aren’t any real blockchain developers on this supposed blockchain project, then why not demo it? I could sit here and ask questions all day, but we already know the answer.
If you didn’t notice any of these red flags, you just might be wearing rose colored glasses – and you definitely shouldn’t be involved in ICO speculation. They’re hoping to raise a minimum of $150,000 and a cap of $400,000 in their pre-sale tomorrow – let’s make sure that doesn’t happen. They’re planning their full ICO in November – for the sanity of this industry, that can’t happen either. If you see someone tweeting or talking about Langpie or any other sketchy ICO – please, please, please link them to this article.
Thanks again to K for bringing this to my attention, I truly hope that revealing the Langpie ICO scam for what it is helps to make up for any potential damage that Langpie has caused for K’s and the blockchain industry’s reputation.