Fraud Risk Assessment:
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  • Last modified: December 7, 2017
  • Legitimacy
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BtcIncome ( was launched in June 2014 providing investment services from Canada. 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 Richesflag-iconIt is advertised that with "You will become financially independent at very short time. You no longer have to work, to think how to get good money." On top of this, returns are "guaranteed".
Source Credibilityexclamation_warningThe website mentions it works with a "group of professional traders", with multiple years of experience in multiple markets to build trust in the company's capabilities.
Social has a 5 percent commission referral program, intended to get users to convince friends and relatives to invest as well.
Guaranteed Returnflag-iconAs stated on the front page: "We can guarantee full return of the investent at a good level daily."
High Return / Low offers a stunning return of up to 2000% in just three days. Considering the possibility to reinvest profits, the annualized rate of return easily exceeds a ludicrous and unsustainable rate of more than a million percent.
Overly Consistent, Positive Returnsflag-iconThere are three available investment plans, all of which return a perfectly steady income percentage regardless of any external variable such as mining difficulty, network hashrate and price. The offered rates have also been the same since June 25 2014.
External Risk Insurancethumb-up-iconN/A
Secretive or Complex Trading Strategyflag-iconArbitrage is said to be the company's magic money maker. And even though arbitrage is indeed a low to no risk trading strategy, it is not one that will make you rich as explained here, because the opportunities to make a profit are limited due to the very nature of arbitrage. The complexity of the arbitrage in general is used to hide this fact, while the concept is also intended to add credibility to the investment strategy.
Website Availablethumb-up-iconYes
Website Registration Detailsthumb-up-iconRegistered June 9 2014, and will expire in 2016.
Website Designflag-iconThe terms and conditions are identical to those on at least a dozen other websites, including BoomBit, Nano-11 and ARXN Group. Other similarities with these websites include the layout and live statistics, making seem like a lazy scam.
Grammar on Websiteexclamation_warningThe first line on the website reads: "We Have Professional Trade SofeWare in Bitcoin Market", which is a pretty good indicator for the grammar quality on the rest of the page(s). Sloppiness and a clear lack of English proficiency are prominently featured.
Payments Optionsexclamation_warningMultiple, but all of them (e.g. Bitcoin, Payeer, OKPAY) leave the recipient with some anonymity.
Service Disruptions & Unbusinesslike Conductflag-iconThe lack of specific terms and conditions result in limited legal basis for doing business.
Contact Informationflag-iconThe company lists both its address and a phone number, but trying to contact the company this way will get you a Chicken Tandoori at best (see verified address).
Verified Addressflag-iconThe given address (and used to register the website) is on:

35 Dundas St W

This is also the address of Bar B Q Tonite. In fact, also the registered phone number (+1.9052680088) belongs to this restaurant.
Verified Ownerexclamation_warning"Aaron Nelsen" is named as the official owner, but this person has no online footprint.
Business Registrationexclamation_warningOntario's (Canada) company register is not publicly accessible, and therefore an official registration could not be confirmed.
Financial Regulator Registrationflag-iconInvestment Services in Canada are regulated by the Investment Industry Regulatory Organization of Canada (IIROC), but nor its owner are registered here.
Independent Auditsexclamation_warningNone
Total Flags: 12 (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.

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.

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.

External Risk Insurance
The fraudster may present some external risk insurance for the investment in order to add to its credibility. In reality, insurance is only seldom acquired and guarantees typically lack substance. Dummy companies are often used to act as the guarantor or insurer.

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.

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. Especially investment services are normally subject to strict regulatory oversight, so a registration should not be hard to find.

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.

Comments (2)

  1. Simargl Perunov December 6, 2016
  2. David Lambert January 14, 2017

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