Since the beginning of cryptocurrency expansion, we’ve found fraud or Ponzi schemes on the way, some have been exposed and definitely established as fraudulent systems.
This fraud system is becoming more common. As in the traditional economy, the crypto world is riddled with such criminal practices.
Tulip Research set out to examine Kuailian to show that it was a Ponzi program, but the company affected in a statement is trying to reject the forensic advisor.
This time we are going to talk about Kuailian, a company that will act as an investor in master nodes and redistribute the profits to the “investors”. While operating the master node itself is an investment, each master node performs functions for which it is programmed, depending on the blockchain on which it is executed.
Usually, instant or anonymous payments are most often enabled. They are also used as part of a decentralized governance system in which node operators vote on development problems related to the blockchain in which they participate.
For each verified operation, the master node has a passive commission for the approved transaction, and the company is located there Kuailian claims to have an investment system that enables virtual acquisition of these master nodes and redistributes the commission money among investors.
Kuailian is now a company registered in Estonia. The data is public and can be checked. However, there are doubts about the correctness. There are those who question that this data guarantees the functionality of the company, because through a specialized company you can register in Estonia or in other European countries without residing there.
What does Kuailian offer?
A non-refundable association premium is required as part of an investment program. You will then need to purchase some of the licenses the platform requires for investors, depending on the level of risk and profit.
The platform asks you to pay for membership at ETH and the investment plan with which you theoretically receive the investment income.
There is a lot of contradicting information on the Internet regarding this platform. Reality shows that it may be a relatively low-risk platform for those who trust it.
The truth is that Tulip Research is targeting it and has released quite detailed information on the platform. In this publication, they also state that the much-talked-about profits are unlikely to be achieved due to the lack of liquidity with which the platform works.
The data shows that the ROIs of the investments do not match the ROIs of the master nodes that are available for review.
In fact, Dash reported an annual return of 5.89% at press time, a number that does not match the profits offered on the platform because, according to Tulip Research, Kuailian has invested more than 60% of investor money on Dash -Node.
The platform also offers a machine learning service that is essentially concerned with finding the most profitable master nodes available to ensure the profitability of the investment, and therefore the variety of nodes needed to redistribute profits.
However, Kuailian states in its initial information that the investment will be returned in the next 1,000 days and that the profit will be made immediately after payment of the investment plan. This with the possibility to put on again as often as necessary. There is also a referral scheme that can be used to generate additional profits that would normally be made through the initial investment.
Kuailian replied to these allegations of fraud
Unlike other proven fraud platforms, Kuailian dedicated time and space on its platform “deny” Claims about the suspicion of being a Ponzi scheme.
A 17-page document is posted on the official site of the platform detailing the claims of the Tulip Research report.
Each of the statements that make up the report are categorically refuted with arguments, and in some cases with images, to illustrate how the platform works.
The Tulip Research report contains a flowchart that shows the “Cash flow”. The money is recycled between Binance and Kaken. Tulip Research claims that the money received as an investment or membership goes to the central exchange, is converted to tokens and then transferred to octopuses in Ethereum, where the route of the money is lost.
Based on these statements, Kuailian explains that the process is “necessary”, the functionality of the parities of the coins requires it.
That is, the money gets into the Ethereum, it is converted into Bitcoin and from there into the token beneficial for the master node, but this process in no way means that the money will be recycled.
This is followed by a technical analysis of the profitability of investment pools for invested tokens, which in turn contradicts what Tulip explained in his report.
Regarding the registration of the company in Estonia, Kuailian points out that while they use a specialized company for registration in Estonia, this does not mean that they do not comply with the registration requirements, and even the seriousness of the report for the Refuse to provide evidence of this The platform is a scam.
In this way, the document is developed in every element that Tulip Research has highlighted in a statement to demonstrate that it is a fraud Kuailian has detailed every part of this report and reasonably expressed his arguments, but strangely, he hasn’t refuted a conversation from one of the Crypto Verification Coin employees who, according to Kuailian, would be one of the tokens in which they were invested with the master node. Notes on tulip research:
As if that wasn’t enough, an employee sent us a conversation through the official Discord channels with one of the top managers of the Crypto Verification Coin currency that we were able to verify.
Dennis’ answer regarding CVCC is translated as follows:
Yes, they are a scam. You don’t have a single master node from us. All of our coins have been sold to 200 private investors and we are monitoring them. I can assure you that you don’t have a single master node »».
This platform has just started its operations, so only time will tell who was right, whether Tulip Research’s report or, on the contrary, the Kuyan company is a valid investment platform.
We will closely follow these or other platforms that are part of the crypto world and cause controversy. Btc Surf announced in April this year that it is already a platform that has ceased operations and has proven to be a Ponzi program.
Just as this information derived from Crypto Verification Coin was omitted, certain information that was disseminated on the Twitter social network was omitted in the Fernando Gutierrez “@fernado”, CMO of the Dash Group, who viewed the information disclosed by Tuliap Research to know if the assertion that it had 200 Dash master nodes was true in the investigation.
A lot of curiosity that cannot be dispelled with tests that show that there are 200 masternodos related to Kuailian.
When the official Zcoin channel was consulted on the ownership of the 105 master nodes that it believes are included in its investment portfolio, it referred to the Tuliap report and asked it to read it to ensure the accuracy of those supplied by Kuailian Exclude data. .
Another inconsistency in Kuailian’s response to the public lies in the market volume of the cryptocurrencies he works with. Tulip Research has defined the market volume, market capitalization and liquidity in a simple way:
“First of all, liquidity should not be confused with volume. Both terms go hand in hand, but do not mean the same thing.
Liquidity is the predisposition to exchange at a certain price level. In this case, we use order books to determine and check the liquidity level of a cryptocurrency.
Volume is simply the number of currencies that have been traded during a given period. It is usually common to display it over the past 24 hours.
Just because X coins have been traded in the past 24 hours does not mean that this will continue to be the case in the next few hours. The past volume cannot be used as an instrument to measure the current liquidity of an asset.
The market capitalization is the total value of the coins in circulation, which is obtained by multiplying the coin price by the number of coins in circulation.
A currency may have a very large market cap, but not too much supply or demand. There can be big differences between market capitalization, volume and liquidity. “
Given these statements, Kuailian attempted to deny that the data and calculations offered by Tulip were incorrect, and analyzed the data provided as follows:
This explanation clearly confuses the terms. Market capitalization does not determine liquidity or market volume as stated above.
Trading (to be as clear as possible) an asset is the so-called market volume Kuailian performs an arithmetic operation that shows no liquidity or market volumeHe is just trying to demonstrate that by “owning” the X amount of Masternodos, they have the market volume they claim to have and from which they get the liquidity used to redistribute profits.
An additional, but no less important fact is related to the license that it claims to have held since then As of June 30, 2020, the license for the platform was suspended until August 31 of this year.Tulip Research reflects this on Twitter.
At the same time, the Kuailian team is informing its investors / users that the suspension to which they have been exposed will only take 15 days due to supervision being instituted to determine whether they comply with the relevant regulations.
The truth is that the Kuai team’s information is not real. in such a way that it creates distrust within the community by providing false information about their suspension.
For this reason, and for the pyramid reward systems that the platform has, as well as for everything discussed in this article, it has been crossed out as a scam or Ponzi scheme.
So far, many things play against the platform, the number of inconsistencies and the advantages it offers are not entirely credible. However, it will be the hangman of those who support the platform if it turns out to be a fraud or if it does, on the contrary, it is a novel system for the passive generation of funds.
The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every investment and trade movement involves risks. You have to do your own research when making a decision.