Tuesday, October 21, 2014

NXTautoDAC, jl777, stolen NXT

You've heard the slanderous accusations no doubt.

The story they don't allow you to hear is rather complex, but I'll give it a go.

jl777 is an anonymous web financier who lives on the internet and sells people millions of dollars in ponzi investment products.  He is 100% anonymous and goes to great lengths to keep it that way.

Arrival at NXT

I arrived at NXT with virtually no knowledge of the project.  I was curious about some of their claims.  I got to know some of the people there and some suggested that I make a proposal to improve the currency.  I proposed a feature called Virtual Corporations, which allow for complex internal asset and money management in a p2p environment.  We went through a community process and the community agreed to fund roughly 33,000 NXT(about $1000) for what I estimated to be about 1-2 months of full time work.  The project gained a lot of interest.

jl777 approached me soon afterwards with a vague 'business' proposition.  I was completely unclear as to what his intentions where.  I did not even know he was anonymous at the time, he claimed his name as James Lee and he was a Korean citizen who lived in Argentina.  Next thing I know, there is money in my NXT wallet, some new assets, and lots of activity on the forums.  I had no idea what was happening.


jl777 issues the NXTautoDAC asset


I would in the following days discover for instance an asset with a descriptor that I did not understand.  In forum posts on a completely different project, I inquire as to what the meaning of the word DAC is.  I also complained to several people that I didn't understand the asset descriptor and generally had no idea what was going on.  He had told me that he wanted to help 'monetize' the project.  Not soon after this, he attempted to form another business partnership with me, this time requesting that I open bank accounts in my name.

It turned out that jl777 was manipulating the market and inflating the price of this asset(he has done this several times since with other NXT assest) with my name on it, and convincing others that I was responsible for their investment without my knowledge.  Upon learning this, I decided that I wanted to have nothing further to do with jl777.  Coming out strong against him at that time would result in an immediate and total collapse of the share value in NXTautoDAC.  I gave him several opportunities and hints that he needed to fix things.  He refused to respond in a positive way.  His only interest was bringing in lots of money from mostly clueless investors.

I began to seriously question the entire nature of the NXT project.  I would find out that mostly everyone of any consequence was entirely anonymous(they still are).  I also found out that there is virtually no theory behind their chain algorithm(there still isn't).  In addition I would witness several thefts transpire on the nxtforum.org and the administrators and other so-called "community leaders" didn't seem to care.  There was some indication that they were in on these thefts.  People emerged on the forums such as Tuck Fheman warning us of the ominous implications of Cointropolis' presence and the damage they had done to Feathercoin.  At this point I became extremely averse to everything about NXT, I posted on Bitcointalk.org what I thought about what was going on there.

Sodom is Provoked

Within hours jl777 had mobilized the entire NXT media machine against me- the phrase "bluemeanie stole 1 million nxt" is just one of many attempts and that was the one that stuck, because there was a corresponding transaction that would appear would implicate me in what they call a "theft", however no money was ever coerced from anyone.  As matter of fact I have never had any dealings with any of these people who are bringing charges up against me.  I have never sold them anything, never sold them assets, nothing.  This fairly sophisticated media machine is how NXT keeps their price afloat.  The project has no real talent or technical merit and most people know this, but their targets are the clueless and hapless.

jl777 has access to millions of dollars US in dark money.  It's not hard for him to buy influence on places like bitcointalk.org, or other promotion channels to get his story told the way he wants.  jl777 has a lot at risk, just judging by the Erik Voorhees case, he may be liable for millions of dollars, even jail time.

Antonis, a Greek who runs NXTBLOCKS.INFO, asked if I would refund the money.  I did it within minutes of his request.  This was confirmed by Pouncer.  The harrassment and such went on for several days, caused me major problems, duress.  They issued death threats, they continue to harass me online and it's not over some disputed money- it's over the fact that I know everything about their software and I can articulate the very severe problems it has.  As a professional in this area it is my responsibility to inform the public about projects like this.  Jl777 severely abused my name without my permission, posed very serious hazards to my well being, and cost me significantly out of pocket.  As A Matter Of Fact, during this period after NXTautoDAC was issued, well known and visible community members were trying to get me to fix these core NXT problems, which are entirely known to them.  They just don't have a solution.

All of this, from my arrival to the provocation was roughly 4 weeks.

Edward DeLeon Hickman Writes an Article For Cointelegraph

Things quieted down a bit for a few months.  The shady sketchy things going on at NXT continued.  There was a huge controversy over 2 separate hacking incidents, one of which Cointelegraph appeared to help NXT cover for(the Bter.com incident).  Then someone by the name of Edward DeLeon Hickman of Honolulu, HI approaches me pretending to be interested in my story.  I could tell within minutes that he had no interest whatsoever in my account.  There were other questionable aspects about Edward(multiple LinkedIn profiles, etc.).  His interest was getting incriminating quotes(none of which he managed to get as he doesnt even quote me in the article).  Later we would find out that Edward is a long term promoter for jl777, even a shareholder in one of his ponzi assets.


Threats, Extortion and Worse

At this point I was to learn a lot about how some of these altcoin projects work.  Most of the participants are petty criminals, people who I never really even liked to read on the forums, didn't interact with at all, and had no relation to whatsoever suddenly were coming after me extorting me for money.  Dave Pearce of Amsterdam(Pearce Motorcycle Services) who goes by the name EvilDave is one such character.  It appears his job is to either pump up the coin(probably has a number of accounts) or extort people and do general dirty work for the project 'whales'(which jl777 is).  Once I began to identify him and expose his real world identity, his extortions seem to die down, unfortunately it continues on bitcointalk.org with anonymous accounts(who may be operated by EvilDave).




Lessons Learned

These altcoin projects are mostly scams run by petty(or not so petty criminals).  They use people like me to build up the profile and credibility of the project to convince people like you to invest..  They begged me to write a whitepaper about NXT with my name on it.

take aways,

1) Do not get involved in this project if you value your safety and sanity.

2) Do not in invest in this project if you value your money.

3) Do not even interact with jl777 if you value your life.

9 comments:

  1. After what you have went through dealing with jl777, do you think we should be equally as worried about other projects like NEM?

    ReplyDelete
  2. To give you an idea of the type of people we're dealing with here...

    Most of the NXT insiders were *in on NEM*! They were all positive on it, even though it was clearly a rival project. I guess they couldn't resist another profitable scam even if it conflicts with their first one?

    NEM was a pretty cheaply built con-game where most of the initial 'investors' or proletariats or whatever were actually fake. The admins at nxtforum.org allowed a lot of new anon accounts to be created, and then they all posted to the forum pretending to be different people creating the image that this was some sort of a social movement. I couldn't even believe that some of the people such as Come-From-Beyond were cheering it on. I'm guessing they made at least $100k on that one as well.

    When the first NEM scandal peaked it was roughly the same time that NXT came out against me as well. I was critical of NEM and this made jl777 mad.

    I think some of the die hards picked up the project and there may be different leadership now, I don't really know.

    This will probably conclude your question though: the basic NXT technology is totally flawed and NEM inherits it without much modification. NXT *is not a safe, stable or secure technology* and the devs know this, they know I know this, and they know I can explain this to lots of people- and that's why they have so much invested in making sure my message never sees the light of day.

    ReplyDelete
  3. note that Farley, the admin from NXTFORUM.ORG keeps trying to post nasty comments here.

    A few facts on Farley:

    1) he deleted entire SECTIONS of nxtforum.org to make it look like I did absolutely nothing for Virtual Corporations.

    2) I responded to the accusations regarding theft many many times. Farley buried each and every one in an irrelevant part of the forum so that no one would find it.

    3) Farley certainly had the information to catch at least one of the forum 'hackers' and this crime was never brought to justice. Another forum admin resigned not long before.

    ReplyDelete
  4. Fact Check : Cointropolis did not exist, to my knowledge, in 2013 during the Feathercoin manipulation. 'Justabit' (aka Justabitoftime, aka John, aka Pete, aka John Pete, aka Pete John, aka ... you get the picture) was involved with other individuals in that fiasco. He then became part of or helped form Cointropolis and moved from coin to coin running the scheme, this time for hire. It's pretty genius, albeit evil genius. One could speculate that the same individuals working with John on the UNOCS Pump & Dump scam are the same individuals working with him at Cointropolis ... because it is a possibility and the scheme is only improving each time. But, I do love a good conspiracy. Maybe he's just the most unlucky individual in teh world and these events just happen to pop up every where he does. Who knows.

    ReplyDelete
    Replies
    1. Well you have to look closely at these phenomenon.

      There's a tendency for people to use the honest person as a scapegoat, certainly that's what happened to me at NXT. Early on, the various people such as Antonis seemed to be sympathetic to my story. But as the mob gets more bloodthirsty, sympathy just becomes a non-option. It's a good lesson in how these things just get completely out of control. I would guess people like Bas Wisselink and Ian DeMartino probably didn't know they were getting involved in an extortion campaign and committing real crimes, it just evolved into that.

      re. John I really can't say for sure what the story was. All I know is he arrived, everything on the forums got bizarre and the price started to go up. I would say that some of the developers appeared to not understand what was happened, or at least acted that way. To make it clear one more time, I was just trying to develop a feature that I thought was fairly innocent.

      What's becoming more obvious now is that these altcoins are really wings of Dark Market operations. They dark market ppl sell drugs, guns, etc. and then move the money into bitcoin or launder it through altcoins, or even amplify it with more progressive technologies that allow for investment and such. Now that most of the Dark Market operations are shut down were watching all the ppl who were pumping before now start singing a different tune: "we gotta save this place, guys!" It's dizzying to say the least.

      I don't know much about the UNOCS thing aside from what you told me.

      Getting to(inadvertantly) know some of these NXT ppl you can easily see youre dealing with petty criminal types.

      Delete
    2. but certainly,

      there is a remarkable ability for people to modify their concepts of right and wrong when there are significant payments involved.

      the worst of the attacks online coincided exactly with a number of new projects and 'investments' by jl777. He was literally issuing "cryptopaper" and paying these people to join in on the attacks. For the morally bankrupt there is only one moral value- WHO PAYS ME?

      they will deny deny deny, even Edward DeLeon Hickman did it- until we proved that he was a shareholder in jl777 ponzi schemes, at which point he seemed to drop out of the discussion. Later he emerged elsewhere under his loginid 'fumanchu' trying to find legal support for participating in a ponzi scheme(this was right after the SEC got hot on the issue).

      So the core problem is you've got 1) anonymity 2) untraceable payments 3) clueless kids 4) evil people and this creates an explosive combination that in the end messes up everyone's life. There was even one person, Matthew Czarnek who was so clueless as to use his actual name. He really had no idea who he was dealing with- just yet another one of these kids who spends his life at a computer who has no social life so he begins to believe all these anonymous web forum people are his friends. He explained one that *he has never met any of these people*. He spends most of his day interacting with them.

      Delete
    3. to further illustrate the level of crap these people are in...

      Edward DeLeon Hickman will certainly have to explain eventually to a judge why he was repeatedly promoting and receiving payments from someone who Edward claims is totally anonymous.

      Do you think a judge is going to look on that with kind eyes? Participating in an investment product with someone who is 100% anonymous. That can fairly easily constitute money laundering.

      Delete
  5. This is very interesting and at the same time (if true) compelling!
    Since you stated in your article ''I also found out that there is virtually no theory behind their chain algorithm(there still isn't). '' So what are your thoughts on NXT clones such as NHZ ?

    ReplyDelete
  6. Im skeptical of NXT forks as well(such as NHZ) but in support of NHZ I know they are serious about distancing themselves from NXT(rightly so). I believe they dropped 'NXT' altogether from their name.

    ReplyDelete

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