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Substratum’s missing ICO funds

January 6, 2019

During its ICO, Substratum accepted BTC, ETH, XRP, BCH, and LTC. Below are the total contribution amounts for each cryptocurrency. These numbers are sourced from Substratum’s whitepaper.

  • 154.6736 BTC
  • 17,778.25 ETH
  • 232,105.45 XRP
  • 602.1433 BCH
  • 865.9953 LTC

Here are Substratum’s contribution addresses that were given to ICO investors.

A quick look into the various wallet addresses reveals that Substratum’s funding statistics in its whitepaper are not accurate, and the most obvious example is the difference between the reported and actual BCH contribution amounts. Substratum claims it received 602.1433 BCH during its ICO. However, the given BCH wallet address shows that 1304.26123096 were received in total. In other words, approximately 54% of Substratum’s BCH went unreported and unaccounted for.

At the time of Substratum’s ICO, the “lost” 702.11793096 BCH was worth approximately $295.000. At the height of the bull market, the same amount of BCH was worth over $2.7 million. With so much money in question, this misrepresentation of funds is yet another example of a Substratum red flag.

Update #1 (January 8, 2019) – Substratum community moderator 707bwolf707 has offered the following explanation regarding the missing 702.11793096 BCH mentioned above.

From what I can see the ico ended with 602 BCH. All other BCH were transferred to that wallet after the ico

Whitepaper p. 17/18: https://substratum.net/wp-content/uploads/2017/12/Substratum-Whitepaper-English.pdf ICO End Date: September 14 2017 00:00 ES 602.1433 BCH raised (besides ETH, BTC, XRP, LTC)

BCH explorer: https://explorer.bitcoin.com/bch/address/1KhDawtid3v9kdLLVybPQTWTs5FxfXDrMs September 14 2017 is on page 8. All other BCH transcations happened afterwards.

There is only one outgoing transaction from this wallet address for 1303.01249075 BCH. Since this wallet address was designated as a contribution address for Substratum’s ICO, any funds that were sent to and subsequently withdrawn from this wallet should be considered as ICO contributions. If Substratum did not accept the missing 702.11793096 BCH as ICO contributions, the amount should’ve been promptly refunded instead of mixed with the remaining 602 BCH into a single outgoing transaction.

Furthermore, the version of Substratum’s whitepaper that shows its ICO statistics was not released until December 2017 – two months after the BCH withdrawal. If the whitepaper was released between September 14 and October 9, 707bwolf707 would have an argument, albeit a weak one, but this isn’t the case. 1303.01249075 BCH was withdrawn in early October in one single transaction, and Substratum only reported collecting 602.1433 BCH in its whitepaper, which was released two months later.

Just for fun, let’s entertain 707bwolf707’s explantation and apply it to Substratum’s LTC contributions. According to its whitepaper, Substratum received a total of 865.9953 LTC, a number that wasn’t reached until this transaction on September 18, 2018 at 03:16:08 UTC. Considering Substratum’s ICO cutoff time was September 17, 2018 00:00 EST (04:00 UTC), why are LTC transactions between September 17, 04:01 UTC and September 18 03:16:08 UTC taken into account for Substratum’s funding totals in its whitepaper? The transaction history of Substratum’s LTC wallet sets a definitive precedent for Substratum including contributions sent after September 17, 00:00 UTC into the calculations for its total funding amounts. Therefore, we cannot rule out that the BCH received after September 17, 00:00 UTC were not intended and treated as legitimate ICO contributions.

Update #2 (January 9. 2019) – A followup analysis of the Ethereum blockchain reveals that Substratum’s reported ETH amount has also been misrepresented. This post will be updated accordingly in the near future. Here is a Twitter thread with more details in the meantime.


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