Ethereum Blockchain dApp “333 ETH” Accused of Crypto Fraud by StateOfTheDApps
Fraud and scams are rampant on the blockchain. Perhaps due in large part to the decentralized and private nature of cryptocurrencies, decentralized applications and Initial Coin Offerings (ICOs) have consistently been the source of investor discontent and even major crime. Investors have lost millions of dollars to scams and schemes on the blockchain, having been convinced that there might be a legitimate business behind the glitter and glitz of the whitepapers and businesses.
333 ATH is a decentralized application, or DApp, being developed on the growing Ethereum blockchain. The ICO has already been out for quite some time, and has won the support of thousands of interested investors all around the world. The project is deemed as an “Ethereum distribution project,” and it claims to be able to offer its investors a rate-of-investment (ROI) of around 3.33% per day. But according to one watchdog organization, the project is reliant on the expansion of new investors into the project.
According to StateOfTheDApps, this Ethereum application is a clear-cut case of a Ponzi scheme on the blockchain. As investors are introduced to the market, they can only gain access to the potential 3.33% per day returns so long as the cryptocurrency application continues to gain newer investors on the network.
The decentralized application also checks another major box on the Ponzi scheme checklist. It offers its users life-long payments and profits as a result of their participation in the chain. This is, of course, impossible. Even if the organization lives for many years, it is not likely that it will continue to gain followers and investors indefinitely. As a result, it is not possible for 333 ETH to continue to provide profits to investors for the rest of their lives.
Additionally, red flags pointed out by the watchdog organization include that the process of payment is being executed autonomously, without the participation of any third party. Additionally, this means that there can be no modification or access by the authors of the technology.
A Popular Application
But 333 ETH is not simply an offshoot and unpopular cryptocurrency application. It has already been ranked towards the top of the cryptocurrency application list, winning the support of over 1,500 users each day. The ETH 333 business model is inherently problematic, with the company having won over $500,000 from investors looking to make money over their entire lives.
Popular Business Model
333 ETH is not alone in its Ponzi scheme ways. Watchdog organizations warn that cryptocurrency applications on the blockchain, known as dApps, have been a catalyst for the implementation of the newest iteration of existing Ponzi schemes. These applications make it easier than ever for companies to get away with deceiving investors into believing in a flawed business model.
Hundreds of decentralized applications have effectively stolen funds from investors in complicated Ponzi schemes. For the most part, these dApps have promised investors recurring profits off of an original investment, even though such a system is never actually sustainable.