Lockchain and the Bulgarian Cryptoscammers

Lockchain and the Bulgarian Cryptoscammers

Definitely not Alber Murphy

I wrote this post because I was banned from their telegram channel when I asked questions about the site. Together with some other members who were also banned from their telegram chat we started digging into the project and these are our findings.

Lockchain

I personally come from a travel-tech background, and am very disappointed to see the tactics used by the lockchain team to generate hype about their ICO. The team has a dubious background and their marketing tactics are immoral.

Team background

The lockchain team previously ran the exchange Bitcoin7, which in their profile description they claim was “among the first bitcoin exchanges way back in 2011, 3rd in volume worldwide at its time.” What they fail to mention is that the exchange only ran for 4 months, after which the exchange was “hacked” and all funds stolen. It is likely that the exchange was actually hacked and that the team didn’t exit-scam because their tech was extremely poor. They stored numbers in floats instead of integers and the website was vulnerable to basic CSRF attacks. These were vulnerabilities we could verify, however, the accusations and other dodgy practices they were accused of are far more:

https://web.archive.org/web/20110623034508/http://forum.bitcoin.org:80/index.php?topic=17990.0

Using the same practices in Lockchain?

I’ve been closely monitoring the lockchain ICO as I’m from the travel industry and extremely interested in blockchain. I saw their funding had saturated around the 5300/5300 ETH mark. When I checked after a couple of days they suddenly reached above 6000 ETH. Curious about what gave them the boost after a stagnating 2 weeks, and the price being lower, thus a lower incentive to participate, I stumbled upon the AlbertMurphy website.

The Domain

The domain albertmurphy.com was registered on the 10th of November and hosts solely the article praising lockchain. It is also interesting that they are the only crypto-startup mentioned in the whole paper which is hyperlinked. Yet even here things start looking very strange, it’s not a href=”lockchain.co”, instead it redirects to albertmurphy.com/forward.

After looking at the forward.html I found that it had a pixel tracking code (Facebook page tracking code) which matched the one in the lockchain.co domain. Furthermore, at the bottom of the html is a js script which is hardcoded to redirect to lockchain.co.

Some users brought up the “oddity” of the matching pixel tracking code in the Lockchain telegram chat. Nikola’s (CEO and Founder) response was:

Yet a simple google search shows that each page just receives a single pixel and this can be used on multiple websites. While lockchain claims to have no connection whatsoever to the domain, they managed to advertise it on twitter and facebook before the article was ever indexed by google. It has not been indexed to-date.

Content

First of all it's not a website or blog, it's just one simple page which tries to emulate being a website through text:

Main and Finances are just text, they don't actually redirect you to what you would expect to be a full site/blog.

As I read through the article it strongly reminded me of the lockchain one-pager - before I even arrived at the bottom where lockchain is mentioned. Surprisingly lockchain is listed as “ I can say that the best pick at the moment is called "LockChain.co" (their site – https://lockchain.co ). They perfectly fit all of the value criteria above and seem like a project that can make it in that 1% success stories in the short and long term.”

Analysing their token sales

As of block #4568628 5.7 Million LOC tokens have been created, distribution is as follows:

Top address owns 35% of all LOC 0xd3595e11f2f148af02ed5f8a36a803c34255d957

Top 5 addresses own 54% of all LOC tokens

Top 10 addresses own 62% of all LOC tokens

Top 50 addresses own 76% of all LOC tokens

Top 100 addresses own 81% of all LOC tokens

The above is of the 50% of tokens distributed to participants in the sale. The lockchain team retains the other 50% of tokens, however, these tokens will only be issued at the end of the ICO, therefore, the above figures are accurate as of block #4568628.

Conclusion

I will certainly pass on this ICO, the idea is great but some minor digging on the team raised some flags for me, which after further digging turned into scam-territory flags. I hope anyone reading this article will not take it at face value but do the research themselves! It's all there on the world wide web.

P.s. While writing this post I had the lockchain.co website live and had about 3 pop-ups every time I switched back to the tab. Very annoying.