How to recognize fraudulent Counterparty assets?


#1

Unfortunately there is no completely reliable way to recognize a fraudulent asset. By its nature Counterparty is decentralized and pseudo-anonymous so the Counterparty project cannot ban or prevent asset squatting and fraudulent issuance of assets.

Here are some signs that an asset may deserve closer scrutiny:

  • Organization or individual purported to have issued it does not mention the asset on his/her Web site
  • There is no contact (N/A)
  • Asset is not locked (more of it can be issued) although the issuer claims no more will be issued
  • Issuer address field (see Issuances tab on the link below) has undergone several changes (may be an attempt to mask the origin/identity of the issuer’s bitcoin address)
  • There is no record of asset announcement on reputable Web sites (including the purported issuer’s)
  • There is no positive feedback or discussion on reputable Web sites (including the purported issuer’s)
  • There is no official information that such asset was issued on Counterparty (e.g. http://coinmarketcap.com/assets/views/all/ does not show that MaidSafe is available on Counterparty, but there is such asset on Counterparty). While this is not a sure sign, it’s a sign.
  • Number of issued tokens doesn’t add up. For example MaidSafe (based on Coinmarketcap.com) issued 452 million tokens, and yet a MaidSafe asset on Counterparty has 4.3 billion tokens which should seem odd.

You can inspect asset properties here:

Other forms of deceitful or fraudulent issuance may be:

  • Asset (name) squatting: issuer uses asset name identical to legitimate issuer to issue fraudulent assets
  • “Look-alikes”: assets that are named similarly to legitimate assets (e.g. ASETT vs. ASSET, SOME vs. S0ME)

Ideally information from issuances should match information provided by the issuer and this should be verifiable on the issuer’s Web site. Issuers could also take additional measures to confirm their identity in asset information such as sign a message with their PGP or private key.

Please perform basic due diligence prior to purchasing unknown assets and familiarize yourself with of Terms of Use for Counterparty.io, Counterwallet.io and Counterparty software. Terms of Use are located at the very bottom of the Counterparty home page (http://counterparty.io).

Example

MaidSafe management has confirmed that MAIDSAFE and MAID are two assets listed on not only Counterparty, but also Dogeparty (a Counterparty fork that works on the Dogecoin blockchain), that are not in any way related to MAID (MaidSafe) listed on the Mastercoin or the MaidSafe Project itself.