Fraud Risk Assessment: HourDeposit

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  • HourDeposit
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  • Last modified: December 7, 2017
  • Legitimacy
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HourDeposit ( was launched in April 2016 providing Bitcoin and Litecoin 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-iconOneCoin is a get-rich-quick scheme that has "created 300 millionaires in a year".
Source Credibilityflag-iconCloud mining scams typically struggle with credibility, so OneCoin was invented to create a better story to sell. Unfortunately it still raises too many questions (see Secretive or Complex Equipment).
Social Proofflag-iconOneCoin seems desparate for more users, as it hands out an extreme 10% referral bonus. It gets even crazier, as you can get an additional 10% during the first 30 days after registring.
Guaranteed Returnthumb-up-iconN/A
High Return / Low Riskflag-iconThere are roughly two ways to generate money with OneCoin being: 1) recruit more users and 2) spend more one OneCoin. Most cloud mining scams are Ponzi schemes, but the former makes OneCoin a typical Pyramid scheme.
Overly Consistent, Positive Returnsthumb-up-iconN/A
Downplaying Risksflag-iconOneCoin doesn't feature any risk disclosure at all
Hardware Equipment
Public Mining Addressflag-iconNo
Pictures of Mining Equipmentflag-iconNone
Secretive or Complex Equipmentflag-iconOneCoin is a classic cloud mining scam with an interesting twist. Rather than not actually mining Bitcoins or Litecoins, you're supposedly mining fictional OneCoins (or private tokens at best). As written on the website "you cannot find OneCoin on coinmarket or other exchanges", so it's only traded internally and it doesn't even have its own wallet. It doesn't get any more shady than this!
Website Availablethumb-up-iconYes
Website Registration was registered June 23, 2014.
Website Designthumb-up-iconGood
Grammar on Websitethumb-up-iconGood
Payments Optionsthumb-up-iconVarious
Service Disruptions & Unbusinesslike Conductflag-iconThe company features many delay tactics in paying out (which is very convenient if you're running a Pyramid scheme), such as locking up commission bonusses and offering users interest for locking up their funds for a long time.
Contact Informationflag-iconThe company does not provide any contact details on its website (merely a contact form)
Verified Addressflag-iconThe company claims to be located in the Bulgarian capital Sofia, but doesn't include an address. The business register doesn't even include OneCoin (see Business Registration).
Verified Ownerflag-iconOneCoin is founded by Dr. Ruja Ignatova, but there are loads of red flags on this person. Probably the worst of all being that Dr. Ruja has been involved in at least two other similar scams ("BigCoin" and "Prosper Club") that managed to steal more than $50 million from investors. More details here.
Business Registrationflag-iconOneCoin Limited is the "official" legal name, but this company name doesn't appear in the Bulgarian Chamber of Commerce and Industry's Trade Directory. This would be expected given the headquarter location (see Verified Address). According to the terms "ONECOIN LIMITED is a company duly registered and existing under the laws of Dubai". Somewhat weird, and seemingly a false claim as well. The name doesn't appear in Dubai's public register.
Independent Auditsexclamation_warningDespite claims that OneCoin's blockchain is audited no independent third party has verified this claim (and no details have been published).
Total Flags: 13 (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.

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.

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.

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