Ethereum Smart Contract Matrix
Is AutoEtherBot Fake or Real?
Why Is AutoEtherBot Fake?
AutoEtherBot is a website that claims to utilize a Smart Contract Matrix to mine the cryptocurrency Ethereum. They claim that you can convert 0.006 ETH into 17.042 ETH in 50 days, which is a Return on Investment of 283,933.33%.
A domain name lookup of the website shows that it has been registered on 30th March 2020. The registrant’s details such as name and location are unknown as they have been protected for privacy.
AutoEtherBot claims that the ridiculously high ROI is made possible by using a matrix to mine Ethereum using a smart contract. It is compulsory for every investor to rope in more investors to be eligible to receive a commission. Right from the outset, it is looking like a transparent pyramid scheme. They have different kinds of matrices to choose from, but they all involve bringing in a minimum of two investors to see returns.
There are no contact details provided and AutoEtherBot does not seem to have a social media presence. There are some unofficial pages such as a Twitter profile with the handle @autoetherbot and a Facebook page by the name ‘Autoetherbot – Philippines’. Investors of the scheme communicate via a Telegram group and the group has 1,853 members at the time of writing this article.
I couldn’t find any substantial reviews analyzing the authenticity of AutoEtherBot. There is a positive review on a Nigerian blog that seems to be written for recruitment purposes. There are also some forum posts by members of the scheme looking to enlist more people.
There is a thread on the forum BitcoinTalk discussing AutoEtherBot where it has been flagged as a scam. There are some users with the opinion that the ROI promised by AutoEtherBot is unrealistic as only 5-7% return is actually viable.
It seems to be obvious that AutoEtherBot is a scam. It has all the hallmarks of a pyramid scheme and the returns promised are downright absurd. Even Berkshire-Hathaway only managed a 129.3% ROI in its best year ever. AutoEtherBot is promising a return which is 2196 times higher in just 50 days.
Though AutoEtherBot seems to have a lot of investors, it doesn’t lend it credibility that most of them seem to be from countries like Nigeria and Philippines which are notorious for being easy prey for scammers.
My prediction is that complaints of fraud against AutoEtherBot will start pouring in within a couple of years. Since it is new, current investors may be receiving payouts. The deception of quick returns is created to help pyramid schemes gain momentum before eventually going bust. It’s clear from the numbers that AutoEtherBot is making tall claims which cannot realistically be true unless it’s a Ponzi scheme.
A few days after publishing this article, I received a response from the Twitter handle @autoetherbot claiming that AutoEtherBot is legitimate as it is similar to another scheme called Forsage. It has apparently been operating for longer and on a bigger scale. Upon review, I found that Forsage looked like a Cryptomining Ponzi scheme too.
I decided to learn a bit about Ethereum smart contracts and it seems that they are nothing more than automated payment agreements. This means that the blockchain is indeed decentralized, but the investment system is still a Ponzi scheme. Though there is no single owner, the people at the top of the pyramid receive the most benefits. When new members fail to be recruited, the entire system will run dry and the bottom-level investors will end up losing their investments.
I tried to get an explanation from @autoetherbot about why AutoEtherBot is not an illegal Ponzi scheme, but no refutations were provided. The Twitter conversation is shared below for reference.
Forsage has officially been declared as a Pyramid Scheme by the Philippines Securities and Exchange Commission (SEC). Since AutoEtherBot operates on the same model, it can be inferred that it is a pyramid scheme too.
“Based on numerous reports and information gathered by the Commission, the entity operating under the name FORSAGE, headed by LADO OKHOTNIKOV, is found to be engaged in investment-taking activities in the Philippines which is NOT AUTHORIZED by the Commission,” the SEC noted.
The model of the DApp resembles with classic multi-level marketing (MLM) scheme as users profit by attracting more users to invest in multi-level “slots” – each slot is twice as expensive as the previous, and returns twice as much profit to the original referrer.
“Forsage’s so-called smart contract partakes of the nature of securities through an investment contract where investors need not exert any effort other than to invest or place money in its scheme in order to profit,” the regulator added.
“The public is advised NOT TO INVEST or STOP INVESTING in any scheme offered by FORSAGE or such other entities engaged in smart contracts, cryptocurrencies, and digital asset trading that are not registered with the Commission and the BSP,” the regulator warned.
Remember: If something seems too good to be true, it probably is.
If you have been a victim of an investment scam, you can take the following steps:
- File a complaint with the payment portal. However, investment scammers mostly use methods such as Bitcoin, Western Union, MoneyGram and other untraceable methods which make refunds impossible.
- Leave a negative review on review portals such as Scamadviser and TrustPilot
- Report the website to Google using the Suspicious Site Reporter extension for Chrome
- Give a low rating to the website on Web of Trust. You can also install their extension for the same.
- If the company has a listing on Google My Business or Google Maps, file a complaint using the Business Redressal Complaint Form. Also, leave a negative review explaining what kind of experience you had.
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