The post with alleged proof of Verge fraud appeared on Reddit. The user who posted it claims he might have found a proof that Verge lied about their $3 million worth of donation collected to pay for highly-hyped MindGeek partnership (most famous website they own is PornHub). Verge team claimed they did not have the access to the funds donated by their community and that they all went directly to MindGeek wallet. On other places, team reps contradicted this claim by saying they will use these funds to pay for Ledger Nano S integration.
The post goes into more details and you can read it below in its entirety:
“TL;DR: they did not just hype the partnership with a hilarious dump afterwards, I showed you they also put donations into their own pockets.
After a recent post criticizing the Verge subreddits heavy censorship and with their next meetup in the netherlands coming, while also starting a billboard campaign in the netherlands I thought it is time to show what I found over the course of the year. I also think scams need to get called out, but only if there are reliable sources to proof it.
So what happened? Verge, after delivering “Wraith Protocol”, selling it as something it wasn’t, opened a new hype cycle in march 2018: donate ~3.000.000$ in Verge and they will reveal a mysterious partnership. While they actually delivered a partnership that would have been valuable without this hype cycle, the surroundings of it should make you think.
But lets see: in a recent interview their lead dev sunerok claimed he had never access to the donation wallet. It was MindGeeks wallet. Huh? Didn’t they also say they will use funds for Ledger integration (when they still thought this will cost them around 75.000$)? Of course they did, look here: https://www.youtube.com/watch?v=Iycgi8q6HNw
When the funds started to move also officials on their subreddit said: moving for Ledger integration, see link
So if you want to to move funds, or use them for integration you actually must have access to it. Claiming now they never had access to it is at least suspicious, and who will believe this? Collecting donations on a wallet you do not control? Never.
Since the Verge blockchain is still almost completely public I found something else, lets follow the funds and connect some dots: the donation wallet
Check where the donations go with one of the outgoing transactions, you will see they all will be paid to the following address: DRC89rUgLsXc6VnyqDaJwNBkvVYoQQbEtx
Checking this address further will show you the last payment it received was on 6th of march this year, so it is still active. And it also is not an exchange, since you will see this address uses Binance as their payout address. Simply check the latest payout september last year, it goes to DQkwDpRYUyNNnoEZDf5Cb3QVazh4FuPRs9 which is known to be Binance.
And to put the last nail into its coffin lets do some blockchain magic. What we know so far: All funds moved to a second wallet. Despite they claiming not having access to the donation wallet, while on several occasions they implied otherwise, lets check the second wallet and connect some dots. The wallet the donation funds went to is actively mining on nlpool.nl (oho, netherlands again? Why always netherlands? 😉 ). But lets proof it:
check the outgoing transactions, for proof the one from 22nd august and see the huge list of inputs. All inputs are controlled by one entity, this is the address cluster heuristic in blockchain analysis. So we can also check these inputs to search for more evidences there is something fishy. The second input from this transaction will already give you the idea: DRmkBj1H2jKj1xkFYv3mpTiDLmPWj7qdhu
A small, steady income of transactions. It looks like mining pool payouts. What I did: check the blocks the pool mines, find out the algorithm (multi algo, meh…) and then check the pools, and I found it: nlpool.nl mining pool mining Lyra2v2
I think we can safely assume MindGeek didn’t start a mining operation too, especially not in 2017: check the transaction from 10th of july 2018 and see on of the inputs controlled by this wallet was active since end of 2017.
Lets sum it up again:
they now claim they never had access to the donation wallet although on several occasions they said or implied otherwise (“moving funds for Ledger”, “we already have the funds for Ledger”).
The funds were moved to a second wallet that is actively mining on a netherlands pool and active since 2017, months before the MindGeek partnership.
This wallet uses Binance to payout its Verge, so it is not an exchange.
Verge is heavily centered in the Netherlands. The first meetup was there, the second will be there, they now started a billboard camapaign there. If you follow their team you will see even more connections to the netherlands. A lot of coincides if you ask me.
While this is not bulletproof it raises TONS of questions that needs to be answered. I promise you if you raise this on their subreddit it will be declared as FUD and deleted. While getting you banned.
Stay away here. From their partner TokenPay too. The Verge devs were the only devs TokenPay apparently had, they still didn’t fix the Fake Stake attack for PoSv3 chains. Be warned, extensive research is possible, and the crypto space still is full of VERY dubious projects. Don’t get burned.”
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