BitClout NFT marketplace suspected of a $170 million scam

Some members of the crypto community suspected the BitClout NFT marketplace of a scam, calling it ‘Bitconnect 2.0’.

BitClout is positioned as a decentralized social network. The project offers the ability to purchase tokens tied to the names of the owners of 15,000 famous Twitter accounts, including Elon Musk and Katy Perry.

According to the whitepaper, the project uses \”a proprietary blockchain architecture similar to Bitcoin\”. The price correlates with the activity of famous individuals.

\”An influencer who tweets about the site may receive a portion of the tokens associated with their identity. Elon Musk theoretically has a claim to the corresponding BitClout tokens worth about $2.96 million,\” according to Decrypt.

Among those who tweeted about BitClout was Neil Strauss, author of \”The Game: Penetrating the Secret Society of Pickup Artists,\” a book about him and his rise as a pickup artist.

Anyone trying Bitclout yet? I’m at https://t.co/5n1Jboms5Y
Public key: BC1YLgWTMT1hecivzS4N1Dvu4UZGPZJkJQUdJRQmhSTsqD2D7LsJSV2

— Neil Strauss (@neilstrauss) March 17, 2021

When you follow the link from Strauss’s tweet, the project site displays the message:

\”Welcome to the BitClout blockchain. A password is required to access this node.\”

The whitepaper states that participation in the ecosystem requires acquiring the project’s tokens by buying them for the primary cryptocurrency on the Buy BitClout page. However, when following the link, the aforementioned message appears:

Decrypt reports that project tokens cannot be withdrawn from the platform. One can only purchase BitClout coins with Bitcoin, then send them to other participants, or buy \”Creator Coins\” inside the closed ecosystem.

Transactions involving BitClout tokens cannot be traced. The project’s code from anonymous developers has not been published.

Funds from users flowed to a single биткоин-адрес. Its balance at the time of writing stands at 2,881.97531607 BTC (about $170 million at the current rate).

The head of blockchain company CipherBlade, Rich Sanders, concluded that the funds raised by the project flow to three cryptocurrency platforms:

• 88.41% — Amber Group;
• 11.17% — Kraken;
• 0.42% — Coinbase.

Then the coins are sent to other exchanges and wallets.

BitClout-related fund flows. Data: Decrypt, CipherBlade.

The diagram above also shows that BitClout interacted with the notorious darknet marketplace Hydra.

Representatives from Coinfirm, a firm specializing in tracking suspicious transactions, compared BitClout to the fraudulent crypto project Bitconnect.

Earlier ForkLog published an article about NFT, in which opinions from various experts on the new segment are presented.

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