Fraud Risk Assessment: SkyHash

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  • SkyHash
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  • Last modified: May 27, 2016
  • Legitimacy
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SkyHash ( was launched in March 2016 providing cloud mining services from Denmark. The company’s legitimacy has been evaluated based on the items listed below. Every individual item has been checked for the presence of obvious red flags or warning signals. If these are present, an explanation detailing what triggered them has been included. A detailed description of the reasons to evaluate each of the included items can be found below the table.

Total Flags: 13 (3 Warnings = 1 Flag)
Phantom Richesflag-iconThe website opens by showing its slogan "SkyHash - the most profitable altcoin mining"
Source Credibilityexclamation_warningSkyHash tries to build credibility by stating it works with an experienced team: "Our ability to combine high-tech and maximum effective production cryptocurrency, based on the 4 year experience in mining and stock trading"
Social Proofexclamation_warningSkyHash offers the usual 5% referral bonus
Guaranteed Returnthumb-up-iconN/A
High Return / Low Riskflag-iconSkyHash's own profit calculator shows that users may expect a completely unsustainable rate of return of at least 20% per month.
Overly Consistent, Positive Returnsflag-iconThe returns at SkyHash are seemingly unaffected by price or difficulty changes.
Downplaying Risksthumb-up-iconN/A
Hardware Equipment
Public Mining Addressflag-iconNo
Pictures of Mining Equipmentflag-iconNone
Secretive or Complex Equipmentflag-iconSkyHash claims to have 244 GH/s of hashing power, mostly allocated to Syscoin and Startcoin (at the very least 50%+). The combined total Hashrate for both networks is hardly 30 GH/s though, making this claim a ridiculous one.
Website Availablethumb-up-iconYes
Website Registration was registered March 6, 2016.
Website Designflag-iconThe terms and conditions are missing (or well hidden).
Grammar on Websitethumb-up-iconGood
Payments Optionsexclamation_warningOnly Bitcoin and other payments methods (like Payeer and Perfect Money) that provide anonymity are available.
Service Disruptions & Unbusinesslike Conductflag-iconThe lack of terms and conditions (see Website Design) result an absence of any legal basis for doing business.
Contact Informationflag-iconThe provided phone number is +1 64-675-17988, while the given address (for the main office) is Aabergsvej 35, 7700 Thisted, Denmark.

The only problem is that the given phone number belongs to the US (New York specifically), as it doesn't make much sense.
Verified Addressflag-iconThe address appears to lead to a residential area, hence it is likely to be fake (which is also supported by missing Business Registration - see below).
Verified Ownerflag-iconNo information on the owner is provided anywhere. The website WHOIS information is hidden (privacy protected).
Business Registrationflag-iconA search in the public company register of Denmark returns no results for "SkyHash", "Sky-Hash", "Sky Hash" or even just "Hash". This company is thus certainly not registered in Denmark.
Independent Auditsexclamation_warningNone

Note that items with a warning instead of a flag indicate that these could occur at a legitimate company. For example, legitimate companies will normally try to persuade you into buying their products. Multiple warnings will, however, still trigger a flag. A description for the listed items is provided below. This list is meant to assist with identifying obvious scams, and therefore does not provide any guarantees that a company is truly legitimate.

Phantom Riches
The most common tactic used by fraudsters is called “phantom riches”. By dangling the prospect of wealth such as “big payoffs”, the scam artist tries to get you to stop thinking logically.

Using the fear of missing out, fraudsters create a false sense of urgency with statements such as “last chance” or “only so few available”. This causes people to agree hastily, before even having the opportunity to think about what they’re doing.

Source Credibility
Persuasion is more likely when the source presents itself as being credible, expert and trustworthy. Common tactics used by scammers to make themselves look legitimate include using fake websites or hacked emails and pretending to be someone they are not. Alternatively, sources can also be external with claims such as “Warren Buffet has already invested in this”.

Social Proof
Fraudsters take advantage of herd behavior by creating the illusion of consensus or social proof that the investment is legitimate with claims that “everybody is already doing it”, or referral programs in which members encourage their friends and associates to invest as well. This automatically triggers something in the head that says: “if everybody [or someone from the inner circle] wants it, it must be good”.

A business is likely to receive far more of our trust when it provides a lot of free value, because of the rule of reciprocity which causes us to tend to feel obligated to return favors after people do favors for us

Guaranteed Return
All investments carry some degree of risk, so a guaranteed profit is a clear red flag. A valid question would be why an organization would try to sell such a scheme instead of using it to get rich themselves.

High Return / Low Risk
Like a guaranteed return, a high return / low risk investment opportunity also defies the common risk-return relationship. The best advice is an old one: “if it sounds too good to be true, it probably is”.

Overly Consistent, Positive Returns
Cryptocurrency markets are among the most volatile markets, hence the performance of any related product or service is also expected to fluctuate.

Downplaying Risks
The fraudster will do anything to provide a false sense of security, such as presenting some form of external risk insurance for the investment. In reality, insurance is only seldom acquired and guarantees typically lack substance. Dummy companies are often used to act as the guarantor or insurer. Other actions may include misrepresenting, or even non-disclosure of risks involved.

Public Mining Address
A cloud mining company must have a public cryptocurrency address in order to participate in the mining process. There is no reason for a legitimate company not to disclose this.

Pictures of Mining Equipment
Cloud Mining companies should be able to provide some pictures of the products they are selling besides any textual descriptions.

Secretive or Complex Equipment
Even in the world of cryptocurrencies one should be skeptical about special competitive advantages without any proper disclosure, or when the information is incomprehensible or incomplete. Too often only the positive elements are accentuated.

Website Available
Considering the importance of  domains and websites in the internet age, there is almost no reason for a legit company not to have one.

Website Registration Details
Very few scam websites survive longer than one year, so domains are generally registered for just one year unless otherwise required for the specific domain. For the same reason, websites created less than one year ago should be considered suspicious.

Website Design
Amateurish, cluttered and disorganized websites can point to a scam as many scam sites use text and images from legit websites and other sources which may not work together very well.

Grammar on Website
Many scammers have limited English proficiency.

Payments Options
Even though cryptocurrency payment options are logical for a cryptocurrency company, it is also very convenient for scammers as the recipient essentially remains anonymous. The same goes for services such as Western Union and Moneygram. Hence a lack of alternative payment options should still be considered a warning signal.

Service Disruptions &  Unbusinesslike Conduct
Especially Ponzi scheme promotors will encourage participants to “roll over” their investment. These schemes are not very fond of investors cashing out, which may lead to difficulties receiving payments and a non-responsive or difficult to reach customer service.

Contact Information
Legitimate companies have very little reason not to list their contact information.

Business Verification
First, you should never hand your hard-earned money over without knowing where it is going. Second, you should do a background check to avoid handing it to a known scammer. Be weary of people without an online identity. Scammers will typically try to hide their identity or conceal their true identity to avoid being easily discovered.

Independent Audits
Audits certainly do not root out every instance of fraud, but auditors do have a responsibility to detect errors or fraud in the company’s financial statements.

  • Alpha

    sky-hash is dead since 15th August 2016! Admin should do regular update to be useful.

    • That’s pretty recent! I check links maybe once a month to see if they’re still alive, so yeah I guess it’s time for another update run 😉