As such, an ICO’s visibility does not depend on the quality of expert ratings, but only on how much money it was willing to pay for premium placement. Yet these paid top placements are not labelled as such. This results in a skewed image of reality for the inexperienced user looking for valid information on which to base investment decisions. No small number of users will mistakenly regard a prominently placed ICO as a recommendation from the rating platform and make investment decisions on this basis. It is evident that most rating platforms are nothing more than marketing tools hawking visibility to the highest bidders under the guise of supposedly legitimate and expert ratings. This alone is exemplary of the kind of dubious business practices that fuel non-transparency in the ICO market and deceive investors. However, it gets much worse.

This experiment is proof of how easy it is to buy expert ratings

Anyone delving into the criticism of the current ICO ecosystem will encounter two terms again and again: Wild West and gold rush mood. And these descriptions are indeed accurate when one observes, on the one hand, the largely unregulated and somewhat legal vacuum in which ICOs vie for the attention of investors, and, on the other hand, the enormous multi-millions that have flowed through countless ICOs in the last few months. The lack of transparency and regulation, as well as the gigantic sums in play, are triggering excesses that not only exceed the limits of good taste but are also de facto investor fraud. The following experiment explains.

It has long been a public secret in the crypto community that so-called expert ratings can often be purchased and are, as such, in no way independent.

In order to determine whether it is indeed so simple to buy supposed expert ratings, we registered an ICO on ICObench. Shortly after we registered with ICObench, a certain Vagiz wrote to us via Telegram and offered to get us positive ratings in exchange for payment.

An expert rating would cost 500 US dollars. After a brief negotiation, we finally agreed on 800 US dollars for two ratings. While talking to Vagiz we were also able to determine with how many stars the experts would rate us.

After Vagiz told us that both ratings had appeared on ICObench, we paid the agreed upon 800 US dollars in Ether. Following the transaction, Vagiz tried to sell us additional expert ratings.

He eventually offered us six more ratings at the price of 300 US dollars a piece.

Again, we purchased one rating at 0.56 ETH. Our ICO had now received a total of three decidedly positive expert ratings, which provided users on ICObench looking for trustworthy information a completely false image. The price: a good 1000 US dollars. Nothing compared to the sums currently circulating in the crypto world.

It gets even worse

Vagiz was not the only person trying to sell us expert ratings via Telegram. Shortly after we registered with ICObench, a certain John Smith wrote to alert us to our mediocre rating on ICObench and offer his assistance.

John Smith’s assistance would cost 1.5 Ether per expert rating. We could eventually negotiate this down to 1 Ether.

In our Telegram chat with John Smith, we wanted to determine whether we could have even more influence on the fake ratings by specifying the rating text for experts to publish.

John Smith answered in the affirmative, and we sent him an extremely positive rating text, one which we very much wanted to read about ourselves.

The fact that the first letters of the four total paragraphs spelled out S-C-A-M went unnoticed by John Smith.

Shortly thereafter, a certain Stephanos Constantinou published a rating with the exact text we had provided.