It has come to our attention that there has been a recent surge in the number of high risk-high, yield projects on the market. As we recently explained with our analysis of Bitconnect, it is difficult to have faith in projects that promise extremely high returns whilst having a business model that appears to be completely unsustainable.

Currently, there are a number of projects that share similar features and are a cause for concern, these features include:

An anonymous team

A very poorly designed website

An extremely vague or poorly explained business model

A business model that is completely unsustainable and shows no possibility for growth

A business model that involves a “lock in” period for investments

Aggressive marketing techniques aimed at onboarding new investors

A reward or referral system that utilizes MLM techniques and greatly benefits the earlier participants in a project

The promise of guaranteed, high interest payments in return for an initial investment.

These features alone do not mean that a project is intentionally seeking to deceive investors. However, when a project exhibits a number of the above features, or possibly all of them, then it is time to recognize the warning signs.

The recent disappearance of Bitpetite has also caused us concern, as the Bitpetite project offered investors a daily return of close to 4% on individual BTC, ETH, and LTC investments. These investments were said to be used to fund a coin mixing operation that would help to obscure the historical activities of the Bitcoin held by Bitpetite.

By mixing Bitcoin into a larger pool of funds and obfuscating their origins, Bitpetite claimed to be able to evade tracking and to enhance anonymity. As a result of providing this service, it claimed to be able to generate enormous profits that would be shared across its user base.

The project offered two main investment periods of 6 weeks and 9 weeks, and promised a 4.5% daily interest rate. Individuals who put money into this project recently woke up to find that the Bitpetite website was offline and the project has seemingly been abandoned.

As a result, we have decided to distance ourselves from these types of high yield coins, and we have classified the following projects as falling into this category.

Chain Group

Coinreum

Hextracoin

Laser online

Regalcoin

Credence Coin

Projects currently running ICOs and crowdsales that also fall into this category include: