Scam Alert – Coinspace

A reader wrote in to CCN, concerned about what is an obvious scam to a veteran Bitcoiner, but might actually rope new folks in with ease. The concerned reader wrote:

Basically they are building a pyramid scheme (sorry, I mean binary member system), where you can buy in and get some hashing power from their cloud mining service. Also they claim, that they will release a new cryptocurrency (S-Coin), which only they will be mining. More absurdly - when the coin comes out, they claim that it will have a value of 1€ and after some time even more. Also the rewards for members are extravagant (iPads, iPhones, Macbooks, BMWs, luxury trips), not to mention the money which they promise from the mining service.

Based in Malta, the company has a variety of websites to watch out for, from S-Coinspace.com to their blog, as well as various YouTube channels and videos. It is reminiscent of Josh Garza's Paycoin scam in that a value of 1 Euro is guaranteed when they launch their custom cryptocurrency, S-Coin. A few minutes into the video below, the British-sounding voice actor appears to claim that the “coins” will be mailed to buyers. The minimum buy-in is 300 Euros, which is a small amount to invest if you're an experienced investor, but just enough to not pursue if you lose it.

However, their packages range up to 12,000 Euros, which means that serious financial crimes could be underway. So far none of the videos have gone overtly viral, but the fact that this and other recent scams are still finding their way to the cryptocurrency space is a sad sign of the times. For all the progress we've made in the mainstream media and elsewhere, with major publications like Bloomberg now seriously discussing the internal politics of Bitcoin, cryptocurrency still very much looks like an opportunity to the unscrupulous fraudsters of the world.

Coinspace bears all the hallmarks of a scam, but none as much as looking too good to be true. There's really no need to look much further. One of their videos explains what cryptocurrency is and offers a weak explanation of why Scoin will be so valuable. The site gladly doesn't mention Bitcoin very often, and strangely does not appear to encourage people to send bitcoins in exchange for Scoins. Again, one of the strangest things about this project is that they promise to mail the coins to the clients – a fundamentally awkward thing to say about any cryptocurrency. Why not just send them over the block chain?

Legitimate cryptocurrencies besides the major ones are often hard to determine, but there are things to watch out for. If promises are made that are too good to be true. Indeed, if any promises are made about the price at all, then beware since there is never any telling what the market will do. Just recently with Bitcoin it seemed as if boom times were back, but then the price dropped $200 out of nowhere. No one gets into Bitcoin expecting certain guaranteed returns, and no one should be getting into other cryptocurrencies with that in mind, either.

CCN has reached out to Ante Keleva, the apparent founder of Coinspace, for further comment and clarification on exactly what is going on with Coinspace. If he gets back with any relevant information, this article will be updated to suit.

Image from Shutterstock.

Last modified (UTC): November 12, 2015 11:00 AM

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P. H. Madore @bitillionaire

P. H. Madore has written for CCN since 2014. Please send breaking news tips or requests for investigation to bitillionaire+phm@gmail.com. He lives in Maine, USA. A single father of four young children, he does not discourage financial donations, provided they do not come with strings attached.

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