By Ana Balashova (@coinjive)
October 31st, 2018

Five ICO Advisors from Hell

Five ICO Advisors from Hell

By Ana Balashova (@coinjive)
October 31st, 2018

Future Times Halloween Special

If you are not a complete newbie in a crypto world you know that it can get pretty ugly at times. Thousands of driven inexperienced greedy youngsters are flocked into blockchain startups to get their own share of crypto wealth instead of building the next big thing that will actually change the world. On the other side, those who’d love to succeed and build a proper business are also struggling to secure a strong mentorship in the industry.

Myriads of blockchain experts still a bit wet behind the ears, are flying around, offering “advisory” so then stumbling around hundreds of ICO whitepapers you see the same faces over and over again.

And somewhere, at the bottom of your heart, you suspect that those advisors are not that helpful and everyone is too polite to talk about it.

There have been attempts to change things for the better, take this piece from Cointelligence for example. It’s filled with unflattering screenshots uncovering laziness and complete lack of due diligence of some well-known characters in the industry. And although it’s fun to read, it doesn’t really prove the ones inability to be a great mentor and help nurture a startup.

For this Halloween special Future Times decided to focus on some clearly questionable advisors with a proven track of records on not being a great choice.

But first, let’s try to identify what makes a good advisor 😉

This topic is not very popular amongst scientists, so we will stick with findings from Endeavor Insight, the research arm of Endeavor, a non-profit that supports high-impact entrepreneurs across the world. We believe those still make sense.

Company’s analysts combined data from CrunchBase, LinkedIn, and AngelList and interviewed nearly 700 founders. They also identified top performers among the founders’ businesses. To make the list they had to meet at least one of the following criteria: an exit of at least $100 million, being in the top 10% of the peer group in terms of the amount of funding raised and the number of employees hired.

One of the most vivid traits of a top-performing start-up, according to the analysis, was having a mentoring relationship

33% of founders who were mentored by successful entrepreneurs managed to make the list of top-performers. Which is over 3 times better than the results of those not mentored (10%).  Researchers stress that it shouldn’t just be any mentoring, quality matters too. If you’d like your company to be among the best, you have to find a mentor who knows how to achieve that level, because they’ve been there.

So, imagine you are building a proper, compliant, and legal crypto exchange. You need a mentor who’d built a successful one himself. And preferably didn’t go to jail for that. Not to mention the mentor’s involvement should be beneficial to the project, not the other way around.

In crypto world, things can get irrational. That’s why ICO advisors from hell always keep themselves busy.

Excited Yet? Then it’s about time to meet our heroes:

#1 Charlie Shrem

During his college years back in 2011, Charlie Shrem co-founded BitInstant, an e-commerce website that helped people convert dollars into bitcoin. He was only 22 at the time and didn’t really have a strategic vision or management experience jumping into a CEO chair straight out of Brooklyn College with a Bachelor of Science Degree in Economics and Finance.

In 2014 Shrem was arrested for “conspiring to commit money laundering by selling more than $1 million in bitcoins to users of the black market website Silk Road, a site that let users buy illegal drugs and other contraband anonymously.” BitInstant went blank at that time. The man himself spent a year in federal prison and lost, or had to spend on legal fees, most of the money he had earned through his website. When Shrem got out on parole, he got a job washing dishes.

Not to mention there were other unpleasant things going on, like inability to ensure proper service or criticism and warnings from New York State Department of Financial Services for not following money-transmission laws, and more.

And yet, here he is, advising dozens of blockchain startups in his unclear area of expertise. Some of the titles on his ICObench profile include “bitcoin pioneer”, “blockchain expert” and “legendary entrepreneur.”

#2 Ian Balina

As his own website states, Ian Balina is “an influential Blockchain and Cryptocurrency Investor, Advisor, and Evangelist. He has appeared in The Wall Street Journal, Forbes, CNBC, etc. for his work in analytics, cryptocurrencies, and entrepreneurship… Ian currently advises MetaHash, Phantasma Protocol, Nucleus Vision, and Pareto Networks.”

However, Ian’s level of proficiency along with the benefits of being “Ian the advisor” is still a bit questionable. Or maybe It’s me who finds it weird that such an expert may lose all his crypto fortune because of his wallet’s hack during yet another ICO Review Live Stream.

And how about being a part of a very messy scandal over huge advisory fees that leaked out and turned projects supporters into a bunch of very upset people as it happened with Ian and Chromaway?

Another story not to be forgotten is the public ICX tokens sell-off back in March 2018? According to Ian himself, it happened after ICON team, one of the largest blockchain networks in the world, expressed their desire for the influencer to stop being associated with the project.

Do you still want Ian’s help in sending your start-up to the moon?

#3 David Drake

As his ICObench page says, David Drake is the “Founder and Chairman at LDJ Capital, a multi-family office which deals in funds worldwide with over $1.5 trillion in assets, and maintains over 50+ global directors and family office partners.”

Besides mentioning trillions of dollars, the description states that Mr. Drake is “seen as a leader in cryptocurrency” as he’s recognized the value of digital assets when the humanity was avoiding it. It all started in 2011 when Mr. Drake was co-working “on the JOBS Act to create new laws underlying all fundraising in the U.S. for all ICOs.”

This smashing profile also lists somewhere around 75 ICO projects he’s associated with.

You wouldn’t doubt this guy knows his stuff, right?

However, earlier in October the Securities and Exchange Commission (SEC) announced it’s halting an ongoing pre-Initial Coin Offering (ICO) and planned global ICO campaign previously scheduled for December 2018 of Blockvest LLC, “The First Licensed and Regulated Tokenized Crypto Currency Exchange & Index Fund based in the US.”

And guess who was listed on the project’s team page (that apparently was deleted from the project’s website, yet the data are still available elsewhere, but to play it safe, please see the screenshot below) as a Chief Strategy Officer?

Yes, that was David.

The main reasons for SEC to have halted the sale were Blockvest’s false declarations of it being ICO and its affiliates receiving regulatory approval from various agencies, including SEC. But there was so much more that went wrong with this project. Future Times has recently covered the story in deeper detail.

Don’t ever use SEC logo to promote your ICO – it’s kind of a no-brainer in the crypto universe. Would you still call a Chief Strategy Officer that picked this strategy for his own token sale a great mentor? Think twice –  you can never overthink when picking the right people for your team!

# 4 Arthur Lipatov

Arthur Lipatov is not a big name on the global crypto map. However, he is a well-established brand in Russia and CIS countries. So, while local blockchain community is blooming, Arthur always has some projects to occupy himself with.

Judging by his Facebook profile he worked as an advisor or some type of help to a substantial number of blockchain-related startups including, exenium, FLOGmall, Araneobit, etc. (for more please see the screenshot below).

Right now, he dedicates most of his time to a project called Silicon Valley. And, well, yeah, the title “founder and CEO of the Silicon Valley” sounds pretty cool, but it’s still hard to comprehend what that project is about (apart from the fact that the team is running a token sale).

We won’t be evaluating Arthur’s lengthy biography in full, but several episodes are worth mentioning.

First and foremost, take a look at the warning tweet from KICKICO Founder (below). Since Arthur was abusing his ties with KICKICO to establish his own personal brand in the space, Mr.Danilevski decided to put an end to it.

Another peculiar situation involving Lipatov occurred as the result of him being involved in a project called Universa, where he was considered a community director. At the end of the day, things went very ugly with the project’s CEO dragging Arthur to the court.

#5 Tim Enneking

Managing Director of Crypto Asset Management is not that big on all the advisory roles, however, Mr.Enneking has participated in several projects. According to his own LinkedIn profile the list includes MedX, Practical, Presearch, RNDR, etc.

For example, earlier this year, in January to be exact, he joined the project called MedCredits to share his expertise in “asset management, networking, financing, and business development”, as stated in company’s press-release.

Recently, in September, Timothy made the news headlines getting slapped by SEC.

In late 2017, a California-based hedge fund manager and its sole principal Timothy Enneking raised over $3.6 million within a four-month period while falsely marketing his fund as “regulated by the SEC”. By being a part of the unregistered public offering and allocating more than 40% of the fund’s assets in crypto securities, Crypto Asset Management caused the fund to operate as an unregistered investment company.

And yes, nobody died, but it doesn’t seem like a proper way to run a legitimate business in one’s field of expertise. Although, we like Tim.

That’s enough scary stories for today. We hope that this list will help you navigate in the world full of hellish advice and we promise to investigate some of the cases further to keep you safe and well-informed 😇