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Potential Insider Trading Prior to Substratum’s V1 Delay Announcement

January 3, 2019

Earlier today, I came across this Reddit thread about the price of SUB pumping 15% in the days leading up to the scheduled EOY2018 release of SubstratumNode V1. I did not find this initial price increase to be suspicious because “buy the rumor, sell the news” is a very well documented behavior in capital markets. What I did find suspicious was the subsequent downtrend that started around 7 PM (UTC) on December 30, 2018. Here’s a chart showing the price action of SUB/BTC on Binance along with a few observations.

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Justin Tabb claims SubstratumNode’s “self-healing” will make it unstoppable →

January 2, 2019

Justin Tabb:

When you go and connect to a VPN server, you’re connecting to or whatever it is, and that’s a single point of failure most of the time. So China’s able to very easily pull down from what we’ve heard from Chinese citizens that are inside of China uh new VPNs as they pop up. The difference with Substratum is that it’s myriad points, right? So if you knocked down one point even if you could, which you know it’s being built that you can’t. But even if you could knock down that one point, you know because of the self-healing that’s rolling out right now, it finds another one automatically. You don’t have to restart the product, you don’t have to change any settings. The idea is that it just continues to work. It does all the hard work for you. And so I’m very excited where we are headed in 2019

I think Substratum’s “self-healing” property will ultimately be the cause of its downfall. It’s obvious that a node on the Substratum network will always know the IP address of the next-hop node. Since this is the case, a quick inspection of SubstratumNode’s command line interface (CLI) will reveal the IP address of another node on the network. If that IP address is locally blocked, the node software should then begin the process of “self-healing” and look for another node on the network. Rinse and repeat this process, and you’ll soon have a list of the IP addresses of nodes on the Substratum network.

Now that I think about it more, it doesn’t even have to be so complicated. Another way to harvest IPs would be to set up a basic VPS with NGINX or Apache and upload a simple web page. Next, just browse to the VPS’ IPs through the Substratum network and block the exit node IPs that hit the VPS. If Substratum’s self-healing feature works as advertised, the node software should continuously rotate exit nodes, which makes it extremely easy to compile a full list of IPs to block. This flaw could potentially be very dangerous for Chinese citizens due to the government’s control over telecom companies. With a list of IPs, the Chinese government could potentially identify individuals who are using SubstratumNode. I hate censorship, but SubstratumNode doesn’t seem to be the answer.

Self-healing or self-destruction?

Substratum Changes Amplify Exchange Whitepaper Mid-ICO

December 31, 2018

Substratum’s second ICO for its Amplify Exchange started over two months ago on October 1, 2018. Two days ago, I noticed the whitepaper link was no longer working on Amplify’s website. Since then, the 404 error has been fixed with a link to a newer version of the whitepaper. The original whitepaper was marked V5.12, while the new whitepaper reads V7. It’s strange for a project to swap out its whitepaper during an ICO process (before or after is okay), so let’s take a look at the changes that Substratum made mid-ICO.

To compile the information below, I ran a diff between the two PDF files. The text from each whitepaper is highlighted by individual blockquotes (V5.12 comes first, V7 comes second), and the changed text between the two versions is bolded and italicized.

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Substratum Commences ETH/USDT Trading with ICO Funds to Recoup Losses

December 22, 2018

Earlier this week, Substratum CEO Justin Tabb made an update video sharing details about the SUB token swap and smart contract update. Near the end of the video, Tabb discusses Substratum’s stance on treasury management. Specifically, Tabb revealed that an in-house trader will be using ETH raised from Substratum’s ICO to conduct trades with the goal of increasing the firm’s ETH holdings. To my knowledge, this move is unprecedented in the sense that no other ICO-funded project has publicly acknowledged the trading of ICO funds on unregulated exchanges. Before we get into the implications and of this announcement, here is Justin Tabb’s statement.

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