Fraud Risk Assessment: SkyCoinLab

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  • SkyCoinLab
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  • Published on:
  • Last modified: December 7, 2017
  • Legitimacy
    Editor: 1%

SkyCoinLab ( was launched in April 2014 providing cloud mining 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.

Total Flags: 9 (3 Warnings = 1 Flag)
Phantom Richesthumb-up-iconN/A
Source Credibilitythumb-up-iconN/A
Social Proofflag-iconSkyCoinLab has a 5 percent commission referral program and also features fake testimonials. The picture that shows "John Rodrigue" is an old image that was used on multiple websites well before SkyCoinLab was founded. An example from 2011 can be found here. The same goes for "Sue Medora", whose picture returns about 30 results on Google of which at least one can be confirmed to date back to 2012.
Guaranteed Returnthumb-up-iconN/A
High Return / Low Riskthumb-up-iconN/A
Overly Consistent, Positive Returnsthumb-up-iconN/A
External Risk Insurancethumb-up-iconN/A
Hardware Equipment
Public Mining Addressflag-iconNo
Pictures of Mining Equipmentflag-iconYes, SkyCoinLab features a few hardware images, but like the testimonial pictures these are far from unique and thus do not represent SkyCoinLab's equipment.
Secretive or Complex Equipmentexclamation_warningThere is no information available on the mining equipment other than the vague description "28nm ASIC technology".
Website Availablethumb-up-iconYes
Website Registration Detailsthumb-up-iconRegistered January 22 2014, expiring in 2017.
Website Designflag-iconApart from several fake images also the terms of use include little original content. Most of the featured text can be found on a few external sources.
Grammar on Websitethumb-up-iconGood
Payments Optionsthumb-up-iconMultiple
Service Disruptions & Unbusinesslike Conductflag-iconThe lack of specific terms and conditions result in limited legal basis for doing business.
Contact Informationflag-iconThe company doesn't list its address, but only provides a phone number (+1-705-806-1858).
Verified Addressflag-iconThe official registration is on:
2280 long lake RD unit 1
sudbury ON P3E 6W9

The website, however, is registered at:
1174 St.Jerome Unit 107
sudbury P3A2V9

While the owner is registered on:
431 frood rd
sudbury ON P3C 4Z9

Even though they might look similar, there is no valid reason for three different addresses.
Verified Ownerflag-iconAll sources point to the name "Michel Jules Lavoie" as the official owner. Additionaly, Abdelkhalek BAOU BAOU is listed as the second owner. The latter person is said to live at:
Rue 18 N° 14 Lot Old Taleb Ain Chock
casablanca 20460

Abdelkhalek Baou is a known scammer and can be linked to Ponzi scheme sites like the (deleted) adsmoneyshare. The scammer uses the same email address as the person on this address, which is similar to the one by SkyCoinLab's owner. It's not decisive evidence because he is at least smart enough to modify the address slightly. It doesn't help that Michel Jules Lavoie can also be linked to other Ponzi schemes.
Business Registrationthumb-up-iconSkyCoinLab is registered as SKYCOINLAB CRYPTOCURRENCY SERVICES Incorporated with corporation number 8950440 and business number 842120180RC0001.
Independent Auditsflag-iconNone, the Annual Filing of the company is also overdue.

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. A valid question would be why an organization would try to sell such a scheme instead of using it to get rich themselves.

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.

Public Mining Address
A cloud mining company must have a public cryptocurrency address in order to participate in the mining process. There is no reason for a legitimate company not to disclose this.

Pictures of Mining Equipment
Cloud Mining companies should be able to provide some pictures of the products they are selling besides any textual descriptions.

Secretive or Complex Equipment
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.

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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