Some events may leave you wondering if the world is real or just a projection. This feeling occurs when I encounter some weird and anachronistic things. It’s like seeing a OneCoin advertisement as if nothing has happened in the last ten years. Ponzi schemes like the Ignatova affair should be long dead. Instead, they are alive and still operating. In Florida, USA, there is a crypto Ponzi scheme that exploits poor knowledge of staking technology and investment in general. In the very heart of a tightly regulated and financially literate country, some people run an operation that is not very different from Ignatova’s abomination. These people are known by the domain name itenthusiasts.com. They offer colossal returns and use a two-layer MLM scheme to attract ‘investors’ to their so-called ‘world’s leading authoritative leader in the crypto-pledge industry.’
Full disclosure: how we stumbled upon itenthusiasts.com
We were offered the opportunity to place a promotional guest post on itenthusiasts.com. That’s how it started. However, every bit of itenthusiasts.com screams trouble. There will be no guest post, but rather a warning not to invest in seemingly fraudulent enterprises. Accepting an advertisement article for such a thing is dishonest and outright unlawful.
Quick 101 on staking crypto as a source of income
Remember all the fuss about Bitcoin being energy-hungry? There is a way to build crypto without thousands of specialised computers working 24/7 to secure the network. Bitcoin is built around PoW (proof of work), but there are other coins that work on PoS (proof of stake). Those networks and coins do not need any significant computing power to secure transactions. The PoS tech, however, demands that some coins be frozen and provides incentives for those who freeze their own assets to secure the blockchain. Thus, staking was born: people get paid just to hold their assets.
From the perspective of a validator (an entity equivalent to a miner in Bitcoin and other PoW coins), there is no need to maintain large computer farms. You can be a successful validator with just one or two modest computers. This point becomes important later.
Why can even legitimate staking lead to losses?
So, is staking free money? No, it isn’t. The risk/reward equilibrium does not change. Staking is always paid in the same coins you intend to support, not in Tether. Thus, you still depend on the price of what you stake. And here things may get complicated. Let’s consider a real-world example:
Not every coin is ‘stakable’: you can’t stake bitcoin or USDT (Tether, which is digital equivalent of US dollar). Never will you receive payments in stable coins or a stable income for your initial investment. That’s not how it works! One important thing to remember: when you stake any coin, you do not have to transfer it to another address. You are still the owner of the coins. The validator does not own your coins. The validator maintains the contract that your coins will be staked, and incentives will be paid. If someone demands your coins to be transferred to another address, you are certainly dealing with a scammer.
There are other risks too. The validator may be subject to penalties. As a result, your APY may be somewhat lower than expected. Enough about that; for more in-depth information on staking, please refer to valid staking providers or authoritative public websites.
Why do we suspect itenthusiasts.com is a scam?
There are plenty of reasons to consider itenthusiasts.com a scam. While we carefully investigate the case of itenthusiasts.com (aka CRYPTOPHILIAC LLC), we are waiting for the answers we sent to the LLC and will refrain from further publications of our findings. Here is the letter we sent to itenthusiasts.com:
Your company states that it is “the world’s leading authoritative leader in the crypto-pledge industry”. According to which metric or commonly recognised rating is your company the “leading authoritative leader”? Are there any widely accepted ratings to substantiate that claim?
The IT Enthusiast is accepting funds from the general public. It is an investment company. Would you please indicate which licences your company possesses? The SEC, for example, explicitly prohibits US entities from staking schemes. How do you circumvent this regulation? Do you hold a British FCA licence to provide investment services?
Are there any documents that prove CRYPTOPHILIAC LLC is an active company with revenue, expenses, and all the usual business operations? What are the tax returns of CRYPTOPHILIAC LLC?
We were unable to locate physical or rented data centres and facilities belonging or rented by CRYPTOPHILIAC LLC. The promotional reel contains obvious CGI and publicly available clips. How exactly do you serve as a validator, and what hardware and software do you employ?
Please provide us with your ATOM, Hedera, and Cardano validation addresses for further examination.
Please comment on the following offer, listed on your site:
TRX (Tron)
- Staking Time: 20 Days
- Capital Back: Yes
- Daily Rewards: $525
- Total Rewards: $10,500
- Staking Price: 35,000
Is the staking price in USD? How exactly do you plan to return approximately 30% in 20 days when true staking on TRX is reserved for selected CEXes only and is limited to 3-6% APY?
We kindly remind you that nothing we ask may be considered a commercial secret. It is public information that any investment company should provide to customers, media, and authorities upon first request.
We are looking forward to your prompt and detailed responses to these questions, as it is important for us to have clarity on these matters. Your cooperation and transparency in this regard are greatly appreciated.
We’ve got no response from itenthusiasts.com.
