-------

It was in my previous investigation into PlusToken, a China based crypto scam responsible for stealing a record breaking $3 billion, where I came across another one gaining momentum.

I was looking into how the PlusToken scam spread, and seeing that one person after another who was promoting it, perhaps even 'most' of them, were also posting about something else called 'Cloud Token'.

As Chinese police were raiding and arresting those behind PlusToken, the people behind Cloud Token were living like superstars, and still are.

Cloud Token's Ronald Aai loves the spotlight. Here, he is escorted off stage by security at a Cloud Token event.

You can see this for yourself: do a quick search of YouTube for old videos promoting PlusToken, find one 3 months or older from when the company was still active.   Then look at that channels newest videos.  There's a good chance you'll see one promoting Cloud Token recently upload.

Like PlusToken, the overwhelming majority of crypto traders in the English speaking market have never heard of Cloud Token, which is interesting - there's a larger gap between the two markets than I previously would have thought.

The few posts spammers attempted to make in English speaking crypto forums were promptly met with replies calling them scammers.  It seems US/UK traders have generally wised up.

Apparently, this is not the case with the Asian market, as the people promoting Cloud Token are literally the same people who were also promoting a scam who's founders are sitting in Chinese prisons right now.  The temptation for a quick buck is unbelievably strong in some people.

This May Sound Cold, But Don't Feel Sorry For The 'Victims'...

I'm the only journalist to have confronted Bitconnect, the first big crypto scammers, in person at the Silicon Valley Blockchain Expo.

On YouTube the video of my confrontation gained 300,000+ views before they had thousands of people falsely report it and get my channel killed.  I did find a copy of it in another person's video, go to about 2:10 if you haven't seen it.

Packed house at Cloud Token's Singapore Event.

I tried following up with several of them to see how they were feeling the day after Bitconnect stole all their money. Suddenly, all those bad-asses lost their attitudes.

In the case of Cloud Token, i've already spotted several posts and videos dedicated to convincing people that while "Plustoken was a scam, Cloud Token is legit!" - the opposite of what they should have learned.

So don't be fooled - these people will cry when all their money gets stolen and play the victim when the time comes - but try confronting them now, while the scam is still 'profitable' and see how that goes.

The Same Old Bait....

The Cloud Token scam is the same recycled pitch that they've all been.

You know how it goes - give us your crypto, we'll pay you daily returns at some insane percentage.  In Cloud Token's case, it's up to 12% per month.

Of course, featuring the classic pyramid.

For any readers who may be new to this, there's no such thing as a company that can double every investors money every year. This is always a scam, no exceptions.

There's legitimate companies paying interest on crypto - and 12% per year (what Cloud Token says they'll do per month) is a good rate.

Then of course, at the core is the referral program, where users are encouraged to get friends and family scammed as well. This person-to-person promotion is what their marketing revolves around.

It's all smoke and mirrors, so it shouldn't surprise anyone that when we located the contract creation of Cloud Token on Ethereum's blockchain, we find a coin that says only 4 people own any.  Meaning the app doesn't even really use the token at all, I guess there's no reason to really issue any coins, they can just make the app say someone is holding however many they want to.

One Alarming Difference...

Where I start to get a really bad feeling in my stomach is when I see they're pushing Cloud Token as a multi-coin wallet, able to accept all the top coins - and of course, they want all of yours!

The scams of the past have had the basic concept of "send us your Bitcoin, we'll pay you profits in this coin we just created, which can be exchanged for Bitcoin" but at some point they stop this exchange.  That's when everyone is stuck with tons of the scammers worthless coins, and they've disappeared with all the crypto worth anything.

But CloudToken is the first big scam where they're holding people's entire portfolio of coins.

What are they doing? I have no idea, but why does every event for pyramid scheme scams have people doing strange things like this?

But the BIGGEST Difference - These Guys Showed Their Faces...

The previous scams we've mentioned have all had anonymous founders. That's why nobody knows who was behind Bitconnect still.   When these previous scams held events, they simply contacted some of their best promoters from YouTube and Twitter, and encouraged them to host company events in their area.

But the CloudToken 'team' appears to be deeply mentally disturbed, and went straight for the spotlight when the company began to grow in popularity, pretending that they aren't scamming everyone in the room.

Everyone loves the scam when it's  still paying - and these guys couldn't pass up getting some of that love.  It's creepy.

So now, with their identities known, they need to close this thing without having bounties put on their heads.   Which is an awful plan - every time this happens there's people who lost everything, and they're out for blood.

Over the last few days there's been some red flags that Cloud Token may be coming to a close.

"Cloud 2.0" is supposedly here, and they're saying they're shipping phone SIM cards out to their users, who still aren't sure what to do with them.  But, somehow they will be required to use it.

Also announced is that a 3rd party called "Ribbons" will be taking over payouts.  This company does not exist, so if it pops up, it was created only as a shell company of Cloud Token.

My guess is they're going to make it look like nobody liked Cloud 2.0 and "oops, we thought it would be cool, but nobody could figure out how to use it.  Now we're going out of business." 

Of course, the big mystery is how much crypto do they hold? Based on the overlap with PlusToken, which had accumulated $3 billion, this one could easily be in the billions as well.

Or, will law enforcement shut them down before they can execute whatever their exit plan is?

The end is coming, and I have a feeling it's going to be an mess like we haven't witnessed before. We'll be watching!

Have any friends in Cloud Token? What do they say when you tell them the obvious truth? Tweet us @TheCryptoPress 


-------
Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk

One after another, Aziz "Com" Mirza pushed any scam or ponzi scheme with a referral program, as long as he thought it would make him a profit.

Aziz's verified Instagram account is still online, and served as the primary platform to scam his 800,000+ followers.

But posting commission-earning affiliate links to other people's scams started getting old - he knew how much the owners of these scams were keeping, compared to his small cut.

While he is a Canadian citizen, he's also Arab, and claimed to be a Muslim. What seemed like a smart move at the time, he used this to target rich middle easterners - a move that will come to backfire on him.

With an established audience, and plenty of practice - he just couldn't resist starting a scam of his own...

Aziz proudly introduced what he called "Habibi Coin" claiming it somehow was the only cryptocurrency compliant with the strict Muslim Sharia guidelines. 

Ironically, the Twitter profile for Habibi Coin, which hasn't been updated since 2018, still has a pinned tweet that warns their followers to avoid getting scammed - cautioning them that "Scammers are impersonating official @HabibiCoin..."

Aziz pushed his coin with a boldness he hadn't shown previously.  Instagram posts weren't enough, so he then talked his way into a business club called the 'Muslim Entrepreneur Network', where was able to give his pitch on stage and in person to large audiences.

With promises that investors will profit or he would pay their losses out of his own pocket, he brought in a wave of 1500+ new investors with a $2000 minimum - but most invested much more.  $25,000+ investments were common, with the highest known so far from a single person being $500,000.


Aziz gives his pitch for Habibi Coin.

"Com deluded us into believing that he was an immensely successful businessman in Dubai. We were dazzled by his upholstered lifestyle and thought he could be a value addition to the network" says the group's founder Harun Rashid.

There was even a brief period before everything came crashing down where Aziz attempted to break into US/Canadian markets, as seen in a video and podcast from US 'get rich quick' personality Tai Lopez. Surprisingly, these can still be viewed.


We attempted to reach out to Tai for a comment, and have not yet received a response.

Tai's disclaimer does warn that he "may receive compensation for products and services recommended to you" - so perhaps Aziz just paid for the right to play 'expert investor' on camera.

But in reality, Aziz couldn't even scam right.

Okay, there's no 'right way' to scam, but some scammers are smarter than others - and Aziz is far from genius.

Habbibi Coin was never listed on any exchanges, there was an ICO, followed by an announcement that they were extending the ICO dates to raise even more... and well, that's it.

Having covered so many scams, I've noticed many are smart enough to spent at least some of the funds raised on getting the coin listed on exchanges, and doing some post-ICO marketing - this way they're doing something besides just raising funds.


Sure, the scammer was never qualified to launch a real product or service, so the ending is the same - a worthless coin and a rich 'founder.  But at least that founder can blame everyone else by shrugging their shoulders and pointing to "the market" as the reason their coin lost 99% of it's value.  Then, just hope playing dumb works in your favor - unfortunately, sometimes it does.

Then, it all caught up with him...

Aziz has just been arrested in Dubai, after a resident of the nation told authorities he was a victim. Unknown to Aziz, for the last 6 months UAE authorities had been waiting for his next visit.

He is currently being held in Al Awir prison, Gulf News confirmed, with only the general charge of "fraud" given publicly thus far.

While I can't imagine what his defense would be regardless of where he was apprehended, there's not many worse places to be under arrest than in Dubai.  It's not the kind of country where you can hire a high profile lawyer to find some technicality/loophole to get off on.

So while he hasn't gone to trial yet, I feel comfortable breaking one of journalism's rules and jumping to conclusions - we won't be hearing from Aziz for awhile.

When released, he'll likely have charges in other countries to face, with the US, Canada, and Greece all saying he's under investigation as well. After serving his sentence, the UAE would then release him straight into custody of one of these countries when the time comes.

Any current and potential future scammers reading this - learn from Aziz's mistakes.  You can't be a successful scammer without making so many enemies, that you end up getting caught anyway.

For everyone else - I wish I knew what to tell you, some predictable advice like 'if it sounds too good to be true, it probably is'?  The problem is, every honest scam victim I've talked to will admit they already knew this.

Ever try to warn people they're involved in a crypto ponzi scheme, while it's profitable and paying? Try it sometime and watch them tell you how you're just mad that you missed out, while they argue to defend the people who will disappear with all their money the following week.

So - there is no advice to give people who already know better, and do it anyway.  That's why instead, I would just like to kindly request that you don't overplay your 'victim' status if you fall for one of these - you're really owed 50% of the blame.

-------
Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk

Remember Bitconnect? Well, the scammers behind PlusToken would call that child's play.

Bitconnect held the record as the largest crypto scam to date, pulling in around $1 billion - then came PlusToken which grew to 3X that size, and showed no signs of slowing down when they pulled the plug.

But you've probably never heard of it. The ponzi scheme targeted Chinese traders almost exclusively, and managed to remain fairly unknown throughout the English speaking cryptocurrency community.

Considering a ponzi scheme's growth relies completely on word of mouth, that language barrier played a huge role in it not breaking into the US or European markets.

One post on the Bitcointalk message boards shows a perfect example of the disconnect between the Western and Asian crypto communities, where one user asks "Is it legit?" - the responses are generally people who haven't heard of it, and just one person promoting it. The thread ends with the official news that PlusToken has disappeared with everyone's money.

An estimated 10 million people scammed out of over $3 billion...

You won't find a Chinese crypto fan who doesn't know a dozen people who were caught up in it, which isn't surprising when you hear the scammers held over $3 billion worth of cryptocurrency when shutting down operations and attempting to disappear.

New pieces of the investigation have just been shared with the Global Crypto Press, giving a glimpse into the last days of PlusToken as the scammers behind it panic and attempt to clean their crypto, and erase the trail leading from their victims to themselves.

Scrambling to erase that trail they flooded Bitcoin mixers with upwards of 50,000 BTC (a mixer swaps coins between random anonymous users, juggling them internally before finally sending cryptocurrency back to the user, causing the coin to become untraceable.)

But the volume of coins they needed to clean was far beyond what these mixer sites are able to process, if there isn't an equal amount of coins being sent to the mixers by other people, they're just swapping coins with themselves.

That's when they took to exchanges with higher volume such as Huobi and Bittrex, attempting to manually mix them themselves.  The hope was that they could sell dirty coins while buying up clean ones - but anyone experienced with blockchain technology could tell you, this isn't a great plan.  Adding a couple entries to the ledger, and falling extremely short of 'hiding their trail'.

This is where everything fell apart. The coins they were trading on exchanges led right to their origins. At this point, it didn't matter anyway.

Because what the PlusToken leaders didn't know, is that they were already being watched.

This becomes clear looking at the timeline starting June 27th, the date when users began reporting that their funds were no longer accessible and the PlusToken platform was down. Just 5 days later on July 2nd, Chinese authorities announced 6 people behind the scam were already behind bars.

Funds currently accounted for include 50,000 BTC sent through mixers, 35,000 floating around the market, and 20,000 sitting in wallets still untouched.

Security audit firm Peckshield created this visual aid showing PlusToken's fund distribution.

 Authorities are still searching for additional key figures behind the scam who fled China before arrests could happen.

Scammers know - you can't trust a scammer.

In a twist of irony, those who escaped arrest are unable to spend any of their earnings. Out of fear they could end up turning on eachother, the wallets holding the scammed crypto uses multisig.

Multisig means it requires keys from more than 1 person to unlock, so if some members of the criminal group are in prison while others are free - everyone is locked out.

This includes the Chinese government, so you can be sure they're aggressively hunting down anyone who could possess one of the private keys needed to unlock the PlusToken wallets.

If this wasn't enough - there's another one coming!

An unexpected find while investigating PlusToken - an alarming number of people who were promoting it were also recommending another, called 'CloudToken'.

Clearly, yet another ponzi scheme that's spreading fast through Chinese social media.


I also noticed that for many, PlusToken served as a wakeup call.  Ignorant users who were once blindly excited about promises of 10% monthly profits (120% per year, like I said - clearly a scam) are now beginning to ask the right questions - such as 'how?".

But for now, CloudToken is flying high - partying hard like they're using Bitconnect 2017 as their guide.



Closing Thoughts...

It seems like every geographical area, divided by language differences, will experience some kind of crypto scam of their own.

The victims of today become the people who warn others in the future.  But you don't get an army of anti-scammers until a lot of people get scammed.

The mixture of excitement and confusion surrounding cryptocurrency has proven to be the perfect target for these awful, scum people - and as much as I wish I could wrap this piece by sharing the simple solution, I don't think one exists. I think it may just be an unavoidable bump in the road for every new market crypto breaks into.  Warn people if the opportunity presents itself, but they may just have to learn the hard way - if it's too good to be true.. you probably already knew.

-------
Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk