Miguel Leite Follow Co-founder and CEO of Coinvision. +8 years experience in tech and blockchain startups. In crypto for the tech.

How Blockcloud Fabricated A Fake Success

1 min read

How Blockcloud Fabricated A Fake Success - Coinvision

Few days ago Blockcloud had their IEO on Okex and tokens were released yesterday for a supposedly astonishing 10x return in USD. This is the success case that was announced on several news outlets and telegram channels, but the real story is a bit different and demands a critical analysis.

Main facts

  • Before the bear market, Blockcloud sold private sale tokens to many pools and private investors. These tokens were sold at several ETH prices and one of our sources participated in a private pool and reported $500 peg.
  • Some days before the IEO, Blockcloud announced to pre-sale investors that the ETH peg was going to be different and that only 3% of the tokens would be unlocked at this stage, breaking the agreement they previously closed with participants.
  • Pool our source participated with tried to dispute this but it’s yet to get an answer from the team and is yet to receive his tokens. If this happened with one pool, it’s likely to have happened with many private sale investors.
  • Two days ago Blockcloud partnered with Okex to sell 2.5M worth of tokens on their IEO platform. It sold out in one second.

What happened here?

  1. Blockcloud locked many of private sale tokens and reduced total token circulation to 6% (including IEO) in an aggressive and illegal move against private investors;
  2. Okex needed a success case, so our take here is that Okex had whale investors lined up to buy Blockcloud IEO. 1 second is unreal because something simply doesn’t sell out that fast unless you have whale investors lined up to buy exactly $2.5M worth of tokens;
  3. With such a short token circulation plus some shady IEO practice, the only thing Okex had to do was having those whale investors hold while they kickstarted their market making, taking the token to 10x in USD in the easiest way possible. Low circulation + locked up private sale investors + market making = 10x.

What’s going to happen now?

Yes, 10x was a real number in the early stages of trading, but a number that was originated from these shady practices. So while everything looks shiny now, locked tokens will eventually (and hopefully) be distributed and unlocked and price won’t be able to hold.

So while it seems a success case story, this is yet again another market manipulation move that needs to be uncovered. As always, the devil is in the details.