While several companies are working to advance blockchain technology in the gambling space, it is still fair to question whether they run a legitimate business. Fairwin, a proven fair blockchain gambling platform based on Ethereum, has been charged with attempting to run either an exit scam or a pyramid scheme.
The Fairwin blockchain gambling platform, accused of running Ponzi SchemeFairwin, offers a very simple way for users to invest in ethereum development and profit from dividends and referrals, in addition to gambling platforms. As of the end of September, it’s the single biggest driver of volume for Ethereum, making it a pretty big deal in the community.
Clement Lesse, CTO and auditor sat down recently on Ethereum Reddit to warn the community about Fairwin. In his analysis, he concluded that Fairwin had set up a Ponzi scheme. Dividends are well paid to existing investors, but in the end they are configured to pay more than the healthy amount stipulated that the new investor placement will lose their contribution entirely.
To make matters worse, Lesaege also discovered a vulnerability in the contract code that allowed Fairwin’s operators to execute exit scams. If they want, they can deny the future dividends promised to investors by draining all investment systems into their accounts at any time.
Fairwin would not allow this without comment, Lesse said. He later posted his response to his thread:
“Thank you for your suggestions. We have already discovered the vulnerability, but we do not think it is a vulnerability. The contract is determined and the invitation code that you create for the first time is used as the final invitation code. Therefore, the loophole is not valid.
“Also, we have real-time monitoring on our side. It is not valid to enter. Intruders, we will warn you at first, then exclude intruders.”
When Lesse published his analysis, he pointed out that Fairwin was likely to go bankrupt within a week based on the dynamics of the Ponzi scheme. Later, the post confirmed that the investment account was depleted in just a few days. This could be because the investor withdrew the funds or the Ponzi scheme carried out the process.
This is a powerful warning story for both cryptocurrency investors and the gambling business. Blockchain technology is going on for the blockchain industry, but not all creations are created equal. Companies lacking expertise or reliability can be big money and need to be thoroughly investigated.