The 'McAfee Trade' Hits a Nigerian Snag With Finacoin - Bitsonline

The ‘McAfee Trade’ Hits a Nigerian Snag With Finacoin

Antivirus technology visionary and one-time U.S. presidential candidate John McAfee has a newfound passion for cryptocurrency and blockchain technology, reminiscent of his commitment to cyber security in the earlier days of the Internet. His most public exercising of this enthusiasm can be found on Twitter, where over 640,000 followers await his regular “Coin of the week” and “ICO of the week” announcements. However his posts often court controversy — none more than two recent ones dealing with privacy coin Verge (XVG) and Finacoin (FNC), the latter of which appears to be a scam.

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The ‘McAfee Effect’ on Crypto Assets

McAfee’s tweets tend to be followed by dramatic price spikes in his new favorite coin, and surges in investment in the initial coin offerings he declares a liking for.

The “McAfee Effect”, love it or hate it, is a significant phenomenon in a world populated by amateur speculators playing with technology they don’t fully understand. McAfee-inspired Twitter bots, shill bots, trading bots – call them what you will – have been built by developers hoping to lure cash out of wanna-be day traders.

Trend investing is a game of psychology and momentum. While there may be some unsophisticated investors who think McAfee is identifying hitherto unknown fundamental value in these digital assets, most accept the simple fact that a McAfee shill (endorsement) will result in some pump (rise) and dump (fall) trading patterns, presenting an opportunity for some outrageously easy short-term profits.

In a January 5th tweet on his official account, McAfee gave the FINA coin ICO a stirring endorsement: “2nd ICO this week: FINA coin. It eliminates fraud in the maritime and aviation industries – now costing in excess of $1 Billion/year. It is also is (sic) the first coin to combat terrorism and human trafficking – my hot buttons. This one is unique and stellar. https://finacoin.io/”.

Finacoin.io is supposedly developing a digital currency to combat what it suggests is a multi-billion-dollar maritime and aviation industry fraud problem.

Its website is cumbersome and oddly seeks investments in exact increments of $200 USD (worth of bitcoin or ethereum), which can be difficult to send accurately in digital currencies with values that change all the time, and mining fees that cannot always be known in advance.

Their Facebook page has a number of complaints of deposits not appearing after days of waiting, with no sign of customer support. The site has no contact details or information about the team behind the project.

Finacoin splash page
Finacoin’s home page

Twitter Researcher Reveals Finacoin’s Scammy Origins

Some excellent investigative reporting by Twitter identity @MrGlaive revealed the truth as to why there were growing numbers of Facebook and Twitter users complaining of failed transactions and missing money — as well as a general perception of unprofessionalism. Behind finacoin.io is a Nigerian man Ebi Dominic, an alleged crypto and 419 scammer based in Lagos. Finacoin would therefore be a scam.

The software company that McAfee founded and which proudly bears his name “protect(s) 90 of the Fortune 100 companies, 82% of the world’s largest banks, and over 300 million people across the globe”. (He left that company, now an Intel-owned brand, after selling in 1994, and today has no association with it.)

Ebi Dominic
Ebi Dominic

McAfee’s flamboyant lifestyle and love of the limelight do little to diminish his reputation for having a wealth of insight into the more noxious corners of the Internet — though he is himself a highly respected and generally trusted individual in the cryptocurrency community. When a man of McAfee’s stature endorses an ICO, people listen. 640,000 of them, in fact.

MrGlaive, a Twitter user with 224 followers, inspected the metadata of the Finacoin whitepaper (which was plagiarized) to identify its author, checked public Cloudflare nameserver pair data for any other crypto-related domain names in the Leia and Noel nameservers, and examined the passive DNS history of the five domains presumably owned by finacoin.io’s owner.

One of these linked to another domain, which had a brief SOA record suggesting it was held by one Ebi Dominic, the name listed as the author of the Finacoin whitepaper.

Taking the email address associated with that record, MrGlaive found another domain suspended because it was “reported as having been associated with a Nigerian advance-fee scam”. The full outline of the investigation, with screenshots attached and more details about Ebi Dominic, can be read here.

McAfee Reconsiders, Withdraws Support, Apologizes

MrGlaive privately indicated confidence in the correlations he made and his investigative work is impressive, despite requiring little more than some Google and WHOIS searches and an inquisitive mind. He was prompted to delve into Finacoin after simply having a ‘brief look at public posts on the Finacoin (Facebook) site…’. In short, the scam was not enormously sophisticated.

McAfee at first reacted to the revelations with some skepticism, but withdrew his initial support anyway.

We reached out to McAfee via Twitter, but did not receive a response. However on January 10th he issued his own update, tweeting: “I have been presented with evidence that the FINA ICO was organized by an individual associated with a known Nigerian criminal organization. I have no proof that they will not follow through and list the coins or develop a product, but I must withdraw my support.” When presented with the evidence in a private message he was clearly shocked.

How Did Finacoin Fool McAfee?

Why was it that John McAfee was unable to tell the difference between a criminal in an Internet café in Lagos and a genuine tech start-up?

Perhaps he was blindsided by the ICO’s purported secondary aim of combating human trafficking, an issue that tugs more strongly at the heartstrings than most others. He never claimed to be an investor himself, so there is no evidence of any financial self-interest in shilling the scam.

Perhaps, like many others, he was simply swept up by the hype.

McAfee recently tweeted that he was ‘simply pointing out items of interest in a sea of scams and confusion…. I’m merely having fun.’ Presumably, he will tread more cautiously in the future before endorsing any ICOs or coins of the week, and the digital coin community will be better for that.

It would be befitting of the McAfee legacy for him to be mindful of the influence he has in the industry he has come to love, lest he unwittingly damages his standing as a pioneer in the business of keeping people and their money safe online.

Are the events of the past week reason to trust John McAfee’s advice more, or less? Let’s hear your thoughts.


Images via YouTube (John McAfee), Finacoin

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