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Bitera (bitera.biz) was launched in February 2016 providing Bitcoin investment services from Seychelles. 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.
|Phantom Riches||"Become Financially Independent with Bitera" is the main advertising slogan.|
|Source Credibility||The service tries to build credibility seemingly trying to add several months to its short lifespan and claiming it works with a "team of skilled experts who have been working on the currency exchange market for more than 5 years on average". There is, however, no evidence the service existed prior to the website registration date (see Business Registration).|
|Social Proof||Bitera offers the usual 5% referral bonus to promote them "to your friends, family and co-workers".|
|High Return / Low Risk||For many investments even 5% per year is a big return, but Bitera offers this on a daily basis. This is a ridiculous and unsustainable amount considering that it implies a compounded annual rate of return that will make you the richest man alive in just one year. Needless to add, this won't really happen.|
|Overly Consistent, Positive Returns||The investment plan returns a perfectly steady positive income percentage regardless of any external variable such as price volatility.|
|Downplaying Risks||Bitera doesn't explicitly guarantee returns, but does emphasize "the risks of investment losses are very low" and also mentions low risks in its mission statement "to provide every person the opportunity to gain maximal profit from investing at minimal risk."|
|Secretive or Complex Trading Strategy||The company offers "investment management", but doesn't disclose anything specific on its activities.|
|Website Registration Details||bitera.biz is a newly registered website, with its registration date on February 8 2016.|
|Grammar on Website||Good, but the website features little original text (see Website Design)|
|Payments Options||Cryptocurrency and other anonymity providing payment methods such as Payeer only.|
|Service Disruptions & Unbusinesslike Conduct||For a legitimate business the terms and conditions are the legal basis for doing business. The lack of specific terms and conditions (see Website Design) therefore, at the very least, result in a limited legal basis for doing business.|
|Contact Information||An address or phone number isn't provided|
|Verified Address||Bitera is actively hiding its company information. Contact details are not provided and the website registrar data is privacy protected. The website only mentions the company is located in Seychelles, but no documents confirm this (see Business Registration).|
|Verified Owner||The name of the owner is said to be John Lawkins, but this person has no online footprint and doesn't appear in any official documentation either.|
|Business Registration||"Bitera Investments Limited is a legally registered in Seychelles" according to the website. But the Seychelles Business Register has no records for this company.|
|Financial Regulator Registration||Without a business registration it isn't possible to be registered with the financial regulator. As an investment service, this is a requirement.|
|Total Flags: 14 (3 Warnings = 1 Flag)|
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.
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.
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”.
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
All investments carry some degree of risk, so a guaranteed profit is a clear red flag.
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.
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.
Secretive or Complex Trading Strategy
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.
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.
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.
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.
Legitimate companies have very little reason not to list their contact information.
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. Especially investment services are normally subject to strict regulatory oversight, so a registration should not be hard to find.
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.