Fraud Risk Assessment: Shine Bitcoin

Shine Bitcoin
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  • Shine Bitcoin
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  • Last modified: December 7, 2017
  • Legitimacy
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Shine Bitcoin ( was launched in January 2016 providing Bitcoin investment services from the United Kingdom. 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-iconShine Bitcoin offers a classic example of "phantom riches" by trying to lure investors stating: "If you're like millions of other people all over the world, you would gladly spend money to invest in a financial trade that has absolutely no way for you to lose- with bitcoins. We take your investment of money as savings, and you can watch your money grow!"
Source Credibilityexclamation_warningThe service tries to build credibility by stating that it works with a "professional team".
Social Proofexclamation_warningUsers can earn a whopping 8% in referral fees.
Guaranteed Returnflag-iconThe investment plan explicitly mentions "guaranteed hourly profits".
High Return / Low Riskflag-iconShine Bitcoin has one investment plan: 0.22% return per hour for 30 days. This is a ridiculous and unsustainable amount considering that it implies a compounded annual rate of return of at least 25,000%.
Overly Consistent, Positive Returnsflag-iconThe investment plan returns a perfectly steady positive income percentage regardless of any external variable such as price volatility.
Downplaying Risksflag-iconWith "guaranteed" profits (see Guaranteed Return) and "no-risk" investments (see Phantom Riches) Shine Bitcoin does everything it could possibly do to make investing look safe.
Secretive or Complex Trading Strategyflag-icon"The company is involved in Bitcoin online trading and mining." Descriptions like this one make the service look like a lazy scam.
Website Availablethumb-up-iconYes
Website Registration is a newly registered website, with its registration date on January 24 2016.
Website Designflag-iconShine Bitcoin lives up to its name with a website that certainly manages to shine. It looks so fancy that you would almost not notice the lousy terms and conditions, which also happen to be identical to those that were featured on Minute BTC. Minute BTC is another (good-looking) scam that already disappeared, but fortunately nothing is easily lost on the internet. One copy can be found here.
Grammar on Websiteflag-iconLittle original content is featured on Shine Bitcoin, as even the company description is copied from Digital Currency Group Company Grayscale. The only content that may actually be original is the FAQ, but it doesn't look great with Q&A's like:

"How many accounts can I register?

No.[?] We only allow one account per user. "
Payments Optionsexclamation_warningCryptocurrency only, conveniently leaving the recipient with sufficient anonymity.
Service Disruptions & Unbusinesslike Conductflag-iconThe terms and conditions are extremely limited and even appear to be reused ones (see Website Design), resulting in limited legal basis for doing business. For a legitimate business, a robust set of terms is essential.
Contact Informationthumb-up-iconThe service has included an office address on its website (see Verified Address).
Verified Addressthumb-up-iconThe provided and registered address is:

3rd Floor, Riverside House, Riverside Drive, Aberdeen, Scotland, AB11 7LH

This location has not been checked physically.
Verified Ownerflag-iconThe name of the owner is said to be Declan Dunce, but this person has no online footprint.
Business Registrationexclamation_warningShine Bitcoin is registered with company number SC525252. It is, however, important to note that Companies House does not actively check addresses and names.
Financial Regulator Registrationflag-iconGiven that Shine Bitcoin is an Investment Service, it should be regulated by the Financial Conduct Authority (FCA). There is, however, no record of the company in the public register.
Independent Auditsexclamation_warningNone
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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