UroCoin could be a Big Scam – Keep Away

Journalist:
July 21, 2014

Want a coin that’s also a fertilizer? Uro is a coin claimed to be pegged to urea production, and urea is a fertilizer used for over half the world’s food production. Please be sure to read “The Dirty Bits” after the interview as this may be a major scam coin. Be sure to do your homework.

I interviewed Uro’s Currency Development Officer, Bohan Huang, about the benefits of Uro.

[divider]CCN[/divider]

Exclusive Interview with Uro’s CDO

Market Cap: $2 Million USD on 17 July 2014 according to coinmarketcap.com
Maximum coins issued: 1 Million in the first 6 months, then 100,000 per year thereafter
Hash algorithm: X11
PoW and/or PoS: PoW only
Is it able to be mined: Yes, using GPUs, FPGAs and hopefully ASICs in the future
Exchanges: Bittrex, Mintpal, Cryptsy, Poloniex, Bleutrade, C-CEX
Block explorer: CryptExplorer and CryptoCuddlefish
Launch date: The Uro network launched on 9 May 2014.

What is Uro’s purpose?

Uro is a true crypto-commodity, probably the first the world has seen. Each Uro currency unit is pegged to 1 metric tonne of Urea (N46 fertilizer grade – responsible for half of all food produced). This peg is achieved via a unique type of legal consensus: the Uro Protocol. The Uro Protocol comprehensively specifies the procedures for purchasing Urea under the pegged ratio with the Uro currency and has been ratified by four international commodities trading firms so far, with more to come in next months and years. Together as a community, we can show the world new and innovative applications of the block-chain to solving real-world problems.

What problem does it solve?

Uro solves at least three problems, and probably many more in the future that we haven’t even realized yet:

  1. Uro allows holders to hedge against price fluctuations in Urea – this is useful for farmers and other industries that rely on Urea. We believe adoption of Uro by the agricultural sector over the long term can benefit food production certainty and efficiency globally.
  2. Uro solves the issue of long-term price stability in currencies, because a peg to Urea ends up being an abstract peg to the slowly rising price of energy and food over the long term. [That] is because Urea is manufactured in [an] energy intensive process from water and air, then used primarily for food production. This theory is supported by the latest University research: ssrn.com/ko/abstract=2425270 (Hayek Money: the Cryptocurrency Price Stability Solution).
  3. Uro is a solution to the excruciating time delays and exorbitant fees that commodities traders face from the banks. Commodities trading is a space that faces unique banking challenges. Each commodity deal is worth millions of dollars, and you cannot just use EFT for that. Traditionally, complex financial instruments like SBLCs, LCs and BGs are used – and these take at least 21 days to raise and cost at least $100,000 USD in fees. The pegged value of Uro significantly reduces adoption learning curve compared to Bitcoin because there is no confusion regarding the exchange rate. 1 Uro is always worth one metric tonne of Urea – and the complexities are shifted to the exchanges and to the traders – who are experts in the field and have no problem dealing with the volatility, since it is where they [already] make their living.

Who are the developers?

Uro is being developed and maintained by the Uro Foundation with daily involvement in decision making from the community. The Uro Foundation currently has 3 [people on it’s] volunteer staff:

Mohammad Haghighi – QA Engineer
Dr Mukul A. Desai – Chairman
Bohan Huang – Currency Development Officer

What are the coin’s future endeavors and how do they plan on achieving those goals?

We are here for the long haul – to spread Uro to agricultural communities worldwide. We will leverage the best infrastructure in the cryptocurrency space like BlockCypher; our connections with the commodities industry and the will and imagination of [the] community to find new ways to bring farmers and members of the commodities industry into the cryptocurrency space. The approach is multi-pronged, began with the involvement of Urea shipment exporters [and] importers in June and will move on to wholesalers and eventually to farmers over the next 9 months.

Is there anything else you’d like to say about your coin?

Uro shines a new light on the altcoin market by connecting the altcoin economy to the global economy via commodities. Uro will bring significant new investment into the altcoin space from outside the existing cryptocurrency community. [That] is a huge win for all altcoins – because these new investors will become educated in crypto through Uro, and bring new interest to all cryptocurrencies from greater portions of the general population than ever before.

We believe that too many altcoins have sought to compete with each other, when there is so much room to expand the altcoin economy itself to new areas. With [that] in mind, we would like to extend a hand of friendship to all other altcoin communities out there – our fight is with the centralized financial system, not with each other – let us rise together – and reach as many people as possible. All altcoins have their niche, and we should all seek to find our unique positioning in this vast, growing global marketplace.

The Dirty Bits: Is Uro a Scam?

People have often questioned Uro’s claim that 1 Uro is pegged to one metric ton of urea, and there is much debate on if Uro is even legitimate. In order to more deeply investigate Uro’s claims, let’s take apart some of the Uro Protocol document found on Uro’s home page. We first need to examine who Uro truly is before we can expose the scam.

The first line of the document claims that the document is the “Uro Protocol to the NIER Board Members of the Uro Foundation.” That means that the protocol governs the NIER board members when doing business with the Uro Foundation. I did a little digging on who NIER is and why Article 1 describes them as having “traded more than 2 million metric tons of Urea in the last three years.” A company trading that much Urea wouldn’t exactly be trading under the radar, but I was unable to find anything related to that business ever existing. I first did a quick few DDG searches and then tried Wikipedia to see if I could see anything there. As I can’t find anything under that company name, I looked at the websites that Uro claims are part of NIER on their home page.

Global NIER is Green Earth Systems (Hong Kong)

Ratified the Uro Protocol: Yes
Legal Entity: This company is registered in China as “ Green Earth Systems Limited.”
Domain Whois: A simple Whois shows that Santosh Thrimurthula registered greenearthsystems.com.au. Santosh runs a CCTV company (controversial) and claims to have worked at Green Earth Systems on his Google+ account.

NIER’s branch in India is Urea Trading India

Ratified the Uro Protocol: Yes (The name is typed as “India Trading Urea” on the ratification.)
Legal Entity: I could not find a business registration in India for this company using their government’s business name search.
Domain Whois: A simple Whois shows that Vaibhav Sharma registered ureatradingindia.in.

NIER’s branch in China is Crown Team Corp

Ratified the Uro Protocol: Yes
Legal Entity: This company is registered in China as “Crown Team Corporation.”
Domain Whois: Crown Team Corp doesn’t have a website listed, and I was unable to locate one for its company.

NIER’s branch in South Africa is CCL Pillay Group

Ratified the Uro Protocol: Yes (The name on the ratification is typed as “CCL Pilly Group” without the “a.”)
Legal Entity: I could not find a business registration for this company with the government of South Africa on their business search.
Domain Whois: CCL Pillay Group does not have a website listed, and I could not locate one.

An article on CryptoArticles.com links to Chinese government documents presumably purchased from cr.gov.hk, the Chinese government’s company Registration website. If the documents are legitimate, then that is proof that different people own each company. If that is the case, then the four companies publicly disclosed on the Uro website, legitimate businesses or not, are working with Uro Foundation in some capacity.

One thing that stood out to me when I examined the Green Earth Systems website is that it’s news feed seemed like someone was just writing articles to fill a void in the company’s appearance and to talk about Urea and Uro. The feed doesn’t seem to mention much of anything about the other commodities, renewable energy, green soil, and other markets they claim to partake. There’s also a “congratulations” article for a Mr. Singh that looks like someone just found a stock image of a person, and congratulated him on his urea excellence. The pages that describe other markets they claim to be in, such as “agro,” are copy and paste jobs from other websites and do nothing to distinguish their proclaimed presence in that market.

From the website’s “Agro” page:

BASMATI RICE
Basmati is a variety of long grain rice grown in India and Pakistan, notable for its fragrance and delicate, nuanced flavour. India is the largest cultivator and exporter of this rice, followed by Pakistan; it is primarily grown through paddy field farming in the Punjab region.

The grains of basmati rice are longer than most other types of rice. Cooked grains of Basmati rice are characteristically free flowing rather than sticky, as with most long-grain rice. Cooked basmati rice can be uniquely identified by its fragrance. Basmati rice is available in two varieties: white and brown.

Extremely similar text appears on ASI Importers.co.za’s website:

Basmati is a variety of long grain rice grown in India and Pakistan, notable for its fragrance and delicate, nuanced flavor. Its name means “the fragrant one” in Sanskrit, but it can also mean “the soft rice.” India and Pakistan are the largest cultivators and exporters of this rice; it is primarily grown through paddy field farming in the Punjab region.The grains of basmati rice are longer than most other types of rice. Cooked grains of Basmati rice are characteristically free flowing rather than sticky, as with most long-grain rice. Cooked basmati rice can be uniquely identified by its fragrance. Basmati rice is available in two varieties – white and brown.

That sounds fishy to me, and I find it hard to believe that these four companies constitute a union named NIER who trades more than 2 million metric tons in three years. Two companies are not legal entities; everyone and their uncle is named “Meena” on the list of farmers working with the Urea company trading India… errrm… I mean India Trading Urea? Whatever the company’s name is, it reeks of fishiness.

The fact that the official URO thread on BitcoinTalk has a poll asking readers, “Would you like to avoid reading posts from “Truthful,” speaks volumes about the OP’s behavior.

That made me look for what “Truthful” was saying that made the OP so scared of him that he solicited members to ignore him regardless of if they wanted to read his posts or not. I reached out to “Truthful” in a PM to learn more about his views on Uro, but unfortunately I never received a reply from him. You can still view all of his posts on BitcoinTalk. One of “Truthful’s” posts had a quote from the OP, “true-asset,” an account owned by Uro, which announced a Twitter post from @UroFoundation.

The twitter post solicited for people to “try and smear” this image, but that image is so heavily censored that you can’t even tell what company made that purchase order, but only that the company ends in “Traders LLC.” Anyone with a word processing program can design a professional looking purchase order or other documents. Without the name of the company, we can’t be too sure who it’s for or if that company even truly purchased from Green Earth Systems.

Uro’s Press Release

In a press release dated July 19th, 2014, Uro stated the following additional information. (An abridged version of the press release is publicly available on the Green Earth System’s website.)

Sydney, Australia (July 17, 2014)—Green Earth Systems Limited, Hong Kong (GES HK), a global broker of urea fertilizer, has completed the first ever trade of urea fertilizer in exchange for Urocoin (URO). The Urocoin, created and maintained by the Uro Foundation, is a commodity-backed encrypted digital currency based on Bitcoin technology, also referred to as a “crypto-commodity.”

On July 10, Rivaa Exports Ltd. purchased 25,000 metric tons of urea fertilizer, estimated at 3.5 million USD, from Green Earth Services, Hong Kong (GES, HK) slated for resale to Indian Potash Limited (IPL), India’s largest government fertilizer body for urea importation. The initial transaction, originally attempted in January 2014, was delayed for months due to banking compliance issues between Rivaa’s local banks and GES HK’s international banks. The use of Urocoin eliminated these issues and resulted in the completion of the transaction within days. [They saved] tens of thousands of dollars in fees.

“With no setup or banking fees and interest charges, RIVAA and GES, HK are saving close to $300,000 USD on this transaction alone,” said Mr. Nilesh Nair, CEO of GES, HK.

Rivaa Exports Ltd. is an Indian ladies’ clothing manufacturer. Some textile dyes contain urea, so it’s not inconceivable that Rivaa Exports Ltd. could obtain a quantity of Urea if they so desired, but 25,000 metric tons of Urea? Uro claims that they bought that urea for resale to Indian Potash Limited.

Rivaa Exports Ltd. looks like a legitimate company. Their pages are filled out with unique content; they have a robust functional shopping cart system in place, and they have options for all of their products. Those details are ignored on scam sites as creating a website with that much detail takes a lot of time and scammers are more focused on running their scam, than on creating fake websites.

Indian Potash Limited has the same “quality” of design associated with it as that of Green Earth Systems and Urea Trading India / India Trading Urea. You don’t need to be a forensic scientist to see just how much these sites have in common. Potash (or pot-ash) is any of various mined and manufactured salts that contain potassium in water-soluble form, according to Wikipedia. This detail coincides with what the Indian Potash Limited company has listed on their products page, but those products the company is selling do not contain urea, they contain potash, ammonium, and other chemicals.

The company has “trading documents” to purchase Urea from it’s suppliers. Maybe the company carries a urea-based product that they didn’t list on that page. The fact that the company has mostly dead links (they link to “#,” and that tells the browser to go to the top of the current page) is a strong indicator that the site is trying to show the company as being much larger than it truly is by simply having more links. I searched the Indian business registration, and I found that in 1955, someone registered Indian Potash Limited. With it being such an old company, we might have a red herring in our midst, but the website we are examining might not be the real Indian Potash Limited’s company website.

Without any details to back up that Rivaa Exports Ltd. purchased any quantity of urea from anyone for resale to Indian Potash Limited, I might as well say that my company, “John Doe’s Supermarket,” just sold Microsoft $50bn in software so they could resell it to VeriFone for their POS systems. Claims do not hold any weight unless they can be backed up with hard evidence. Green Earth Systems claims to be the seller in the transaction, and we already know that they aren’t a legitimate company. They claim to be the “Global NIER” on the Uro website, but then in the July 6th, 2014 interview with CoinSource, we have Bohan, who claims to be a part of Green Energy Systems Australia, saying that they do not have any urea. Now, somehow they just sold 25,000 metric tons of urea.

CoinSource: Where you contracted by a Urea company, specifically NIER for Uro?
Bohan: I have a position [with] GES Australia – However GES AU is not involved directly with GES global commodities operations.

[…]

CoinSource: Do you currently own any Urea tonnes?
Bohan: No, we don’t hole cargo ships full of volatile chemicals. :)

One might speculate that he means the Uro Foundation or he does not own any metric tons of urea, but his wording in this is unclear. As we are dealing with cryptocurrency, Uro should have given the transaction hash(es) so we could verify this on the block explorer. As this information is not available, and I couldn’t find any single transactions from July 10th for 25,000 Uro, as 1 Uro supposedly is equal to one metric ton of urea, I have to question the validity of this transaction.

Is it just awkward, or is it a scam?

So far I’ve only shown you discrepancies that I describe as awkward, but not a scam. What exactly are people having such a problem with Uro for if it’s just a sloppy business? Well, to expose the meat of the problem, let’s take apart the claim that the Uro Foundation states on their home page that every Uro is backed by 1 metric ton of Urea. Let’s start by addressing what Bohan, the man we just interviewed above, told CoinSource in their interview.

CoinSource: How did you negotiate the price of Uro with the Urea companies, if yourselves have had no contact with them?
Bohan: Corporations intend to accept Uro anyway, and I do have some contact of course.

According to Bohan, corporations just instantly intend to accept Uro regardless of anything else. So, let’s research the price of one metric ton of this stuff.

WorldBank.org reports the price of one metric ton of Urea in March 2014 as being $315.80 up from $297.80 in September 2013. 1 Uro is currently trading around 0.00688001 BTC on Cryptsy, and 1 BTC is trading for $623.00. That means the value of 1 URO is only $4.29. Even though by cryptocurrency standards that’s a lot of money for 1 altcoin especially so soon in the game, it’s nowhere near the $315.80 selling price of 1 metric ton of urea. Uro has never been anywhere near that, but on July 10th, 2014, Uro was at an astounding 0.03490120 BTC! That’s roughly $21.74 at the moment on Cryptsy. Still, I don’t see companies jumping to use Uro just yet, especially not with the awkwardness surrounding this coin. They would be loosing an estimated 98.64% in doing so as 1 Uro is around 1.36% of the March 2014 price of 1 metric ton of Urea. (($4.29 / $315.80) * 100 = 1.36%)

So now we know that no company in their right mind would switch over to using Uro as a static 1 Uro for each metric ton. Urea companies might be willing to accept Uro for one metric ton at the current market value, but not at a static 1 Uro = 1 metric ton. There is no way that Uro truly is backed by 1 metric ton per Uro. That’s the scam factor we’ve been looking for.

As Uro has become quite the store of value lately, I must say that the Uro foundation has done well to come so far in such a short time span, but they certainly are not transparent in how they run their business.

This is a part of CCN’s “Random coin of the day”. Uro logo used with the permission of Uro.io

Disclosure: Rick Mac Gillis is not invested at all in Uro or the Uro Foundation.

Last modified (UTC): July 21, 2014 12:32

Rick Mac Gillis @ManWithNoBrows

Rick Mac Gillis entered the world of Cryptocurrencies in late 2013. He is a controversial journalist committed to investigating and exposing the "dirty bits" of the community. With over a decade of experience in LAMP web development with a focus in custom cryptographic security methods and ethical hacking, Rick Mac Gillis understands the need for proper security standards in cryptocurrency.