Fraud Risk Assessment: Minute BTC

Minute BTC
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  • Minute BTC
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  • Last modified: October 27, 2015
  • Legitimacy
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Minute BTC (minutebtc.com) was launched in August 2015 providing Bitcoin investment services. 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.

Persuasion
Total Flags: 13 (3 Warnings = 1 Flag)
Phantom Richesflag-iconIt is advertised that with Minute BTC there will be "no need to work any more" due to "huge" and "guaranteed" profits.
Scarcitythumb-up-iconN/A
Source Credibilityexclamation_warningThe website mentions it works with a group of "seasoned professionals", including a "support team" in order to build trust in the company's capabilities.
Social Proofexclamation_warningMinute BTC has a 5 percent commission referral program, intended to get users to convince friends and relatives to invest as well.
Reciprocitythumb-up-iconN/A
Products
Guaranteed Returnflag-icon"Guaranteed hourly profits" are part of the offered investment plan.
High Return / Low Riskflag-iconBTC Minute promises an hourly return of 0.10%. This translates to more than 850% per annum. It should, however, be considered that payouts can be reinvested resulting in returns being paid on reinvested returns. Doing so reveals an annual return percentage of well beyond 600,000%, meaning that every invested $1 could, at least in theory, turn into $6,000 in one years' time.
Overly Consistent, Positive Returnsflag-iconThere is only one available investment plans, which returns a perfectly steady income percentage regardless of any external variable such as price movements.
External Risk Insurancethumb-up-iconN/A
Secretive or Complex Trading Strategyflag-iconMinute BTC promises to "make money for you", but does not provide any information at all on how it intends to do so.
Service
Website Availablethumb-up-iconYes
Website Registration Detailsexclamation_warningRegistered August 6 2015, and will expire in 2017.
Website Designthumb-up-iconThe owner did not bother trying to come up with a credible story, but at least the website looks like some effort was put into it.
Grammar on Websiteexclamation_warningAlthough the level of English proficiency displayed is clearly better than the average scam site, there are still plenty of sloppy and poorly written sentences like "We've got the most qualified individuals handling your business possible" and "Yes, It will cause no problem while you use different E-mail address."
Payments Optionsexclamation_warningBitcoin only
Service Disruptions & Unbusinesslike Conductflag-iconThe terms and conditions are extremely limited, resulting in limited legal basis for doing business. BTC Minute also tries to discourage withdrawals with a relatively heavy fee (5%) while simultaneously encouraging reinvestment by offering attractive (extreme) rates and an automatic option to do so.
Contact Informationflag-iconThe company has no phone number and does not list its address. Not even a country is mentioned.
Business
Verified Addressflag-iconHidden (WHOIS privacy protected)
Verified Ownerflag-iconHidden (WHOIS privacy protected)
Business Registrationflag-iconCould not be verified (insufficient information)
Financial Regulator Registrationflag-iconCould not be verified (insufficient information)
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.

Scarcity
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”.

Reciprocity
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 (16)

  1. Nigga wut December 11, 2015
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