THELOGICALINDIAN - An busy business arrangement or article added nefarious
Over the aftermost week, Kicktoken seems to accept appeared out of nowhere. A bread that opened the year with a bazaar cap of $11M had risen to $590M by Monday, with the bread itself accepting over 900% back January.
Yet, all-inclusive numbers of Kicktoken holders are accusatory that they can’t absolutely trade, accepting been the recipients of a “Frozen Drop.”
Now, some associates of the Ethereum association are adopting apropos that what aboriginal appeared to be a business gimmick could be axis into article added sinister. Crypto Briefing has been investigating these contest as they’ve unfolded, and here’s a arbitrary of what’s happened so far.
In November of aftermost year, a post appeared on the Kick Ecosystem Official Medium annual announcement an airdrop, but with a twist. The column accepted that 167,375 Ethereum wallets would accept 888,888 KICK tokens each, broadcast by an blurred “magic algorithm.”
The bolt is that none of the recipients could advertise or absorb their tokens. Kick dubs this a “Frozen Drop,” and states in the blog column that it’s a apparatus to ensure there’s clamminess on its barter for back it launches after this year. Only at that time will holders acquisition out what they charge to do to advertise or actuate of the tokens.
Unexplained Pumping
Early in February, the amount of Kick started to pump. Bearing in apperception that the Arctic Drop started about the end of November, the badge amount connected to abatement alike afterwards the activity started bottomward arctic tokens from about $0.00017 at the end of November to beneath than bisected of that by mid-January. By Tuesday, it was trading at $0.00077, added than ten times its amount in January.
There are no apparent affidavit for this abrupt February pump. The activity didn’t absolution any cogent updates, at atomic according to its account channels. The Arctic Bead tokens are, by definition, frozen, so it seems absurd they’re accompanying to any amount action, decidedly accustomed there was no above-mentioned aggrandizement as a aftereffect of announcement the drop.
However, beforehand this week, a Medium blogger alleged Nicolas Gans appear a post pointing to discrepancies in the trading abstracts for Kicktoken that he’d aggregate application Nakamoto Terminal.
In allegory the data, he activated the aforementioned statistical clay acclimated by the Association of Certified Fraud Examiners. While this affectionate of assay isn’t advised to accommodate accurate conclusions, it does announce if there are red flags aces of added investigation. The cessation of Gans’ column is that his assay raises added questions than it answers.
In the spirit of fairness, it’s account advertence that the architect and CEO of Kick, Anti Danilevski, responded to Gans’ column directly. His acknowledgment admits that the Frozen Drop is a business apparatus and addresses the actuality that distributing airdrop tokens could be construed as a dump. However, he fails to accede the association that the Kicktoken trading action over contempo weeks, with amount aggrandizement of over 900%, could be questionable.
To KYC or Not to KYC?
Trading abstracts notwithstanding, the better apropos about the Kicktoken business initiatives accept arisen about users logging assimilate the exchange’s beta. The Kick barter isn’t yet live, but it is accessible for testing. Even admitting the beta doesn’t absorb any alive trading, users were actuality asked to abide KYC checks to accompany in with testing, until they removed that claim beforehand today.
KYC checks absorb users appointment a archetype of their ID, either a authorization or driver’s license, and a selfie for verification.
This makes actual little sense. With no alive trading, there is no acknowledged or authoritative claim to abide a KYC analysis as no absolute money is alteration hands. When Crypto Briefing queried with Kicktoken why the activity was allurement for a KYC check, a adjudicator said it was because the action was additionally actuality tested.
It’s account pointing out actuality that users are actuality told that the alone way they can alleviate the amount of their arctic Kicktokens is to barter on the barter already it’s live. Although Kick doesn’t appeal that users annals for the beta to alleviate their tokens, it’s axiomatic from the Telegram babble that abounding users accept completed KYC with the compassionate that it’s a prerequisite of unfreezing.
The amount pump agency that the amount of 888,888 Kicktokens exceeded $300 in amount at some credibility this week. So, it’s accessible to see why bodies would be acquisitive to do whatever is all-important to unfreeze their tokens.
Outsourced KYC?
Kicktoken states that it’s partnering with accustomed KYC provider Sum & Substance, a British company, for its KYC checks. Kicktoken claims that it doesn’t accept admission to any of the ID abstracts provided by its beta users, as Sum & Substance retains all of that data.
The catechism is, why does an accustomed KYC provider charge to participate in a months-long beta for a crypto barter applicant that isn’t yet live?
Crypto Briefing accomplished out to Sum & Substance on Feb. 12, to ask if the aggregation could affirm or abjure its accord with Kicktoken, and to concern why KYC checks were alike all-important on a analysis system.
At the time of publishing, cipher from Sum & Substance had yet replied.
British aegis researcher Harry Denley has some acquaintance in KYC-related mishaps and misdemeanors. Last year, Denley appear a blog post assuming how he had been able to bare 15,000 KYC documents, including passports, uniformed cadre IDs, and drivers licenses, from an apart website agenda endemic by a crypto project.
On Tuesday this week, Denley was amid the aboriginal to apprehension that Kicktoken was allurement for beta tester’s KYC data. He pointed out that bodies could be putting a amount on their claimed abstracts accidentally if there was any accident that the KYC checks weren’t actuality performed legitimately.
The Current Situation
As it stands on Feb. 12, developments assume to accept taken a abrupt and affecting reversal.
From Wednesday morning, crypto wallets, including Coinbase Wallet, started assuming Kicktoken Frozen Drop tokens with a aught value. Kicktoken started the day on Wednesday baronial about 33 on CoinMarketCap, with a assets of about $600M. At the time of writing, it’s beneath $1M.
Around lunchtime in axial Europe, which is the timezone for Estonian-based Kicktoken, the beta aback aerial the claim for users to abide KYC, after any added account than “we’re authoritative one database now,” said Borys Sorokin, a Telegram association adjudicator for Kick.
Later in the day, the aggregation appear a Q&A blog post with the CEO on its Medium channel. The blog column declared that the aggregation was not banishment anyone to abide KYC but bootless to abode why it had put KYC in abode for a beta, again aback aerial the requirement.
Suffice to say, Crypto Briefing still has added questions than answers at this moment in time. In the spirit of transparency, Kicktoken and Sum & Substance should verify absolutely who is captivation users KYC capacity already submitted for the beta, decidedly accustomed users were asked to duke them over unnecessarily.
Furthermore, holders of non-frozen tokens will appetite to apperceive what happened today to accelerate such an credible affecting bead in the amount of the company. Either way, based on contest of this week, it’s absurd that we’ve heard the end of the Kicktoken saga.
Crypto Briefing will amend this arising adventure as and back it evolves further.
