Mining is one of the ways to earn bitcoins. However mining is technical and demands attention and expertise, so not everyone can participate in it. This is why cloudmining services are popular.
Unfortunately, most of the services are not reliable because the people behind them are just interested in getting money from people without fulfilling their own part of the bargain as seen with companies such as Cloudminers.uk.
Cloudmining scams usually take similar approach in luring investors to send them money. Basically, their method is creating impression that they are legitimate companies that have been doing business for a long time knowing that many users do not carry out background checks on websites before buying contracts.
Is Cloudminers.uk A Scam?
There are many ways to identify cloudmining scams and an analysis of Cloudminers.uk shows that this is one of those programs that was set up to lure investors by creating the impression that investing with them will yield massive profit.
According to the website,
“cloudminers.uk is a rapidly developing investment project, participation in which allows our partners to earn on changes in quotations of virtual currencies without direct participation in the trading process.”
In effect, they are claiming to be traders making profit from the marginal difference in the price of Bitcoins from various exchanges. This may be a deviation from their established business of mining bitcoins. This is perfectly okay if it were true.
However, it also possible that traders would ask investors to invest and share in the profit, but on the internet it is better that your money is safe with you or where you have a measure of control than sending it to complete strangers who may never pay you back or fulfill any promises they made.
The company also claimed that their traders are experts that all trades result in profit. Even though we have no way of verifying this fact, it is not enough reason to trust this company that its name indicated that they are Bitcoin miners while they are marketing trading of cryptocurrencies.
Nevertheless, one question that we need ask is when they morphed from mining to trading as a focus of their enterprise. In reality we also know that it is not possible to generate the sort of profit that the company claims it could whether through mining or trading.
Who is Behind the Company?
The website did not mention the owners but tries to convince visitors that they have discovered a unique way of profiting from trading cryptocurrencies. They also displayed their latest transactions in the bid to give the impression that people are making money by investing with them.
From its About Us page, it was written that,
“The company operates exclusively in the legal field, using the world’s largest cryptocurrency exchanges Binance, HitBTC, YoBit and others. Cloudminers.uk is a rapidly developing investment project, participation in which allows our partners to earn on changes in quotations of virtual currencies without direct participation in the trading process.”
It is not surprising that sites that wan t to prove legitimacy make reference to more established and legitimate companies. However, there is no evidence that Cloudminers.uk can be trusted. We shall see the reason for this assertion in a moment.
Owners Are Unknown
The site does not provide any form of identification for the owners. This means that some people are hiding behind the anonymity of the internet and cryptocurrencies soliciting that investors send their money to them.
In the internet world, every legitimate business strives to back up its claim with some solid facts that are verifiable such as the social profile of its owners. Whenever a site is asking people to send funds without proving that the people behind it are honest managers, it is an indication that scammers are behind it.
The About Us page does not provide any address showing the physical location of the company even though it mentioned Company House, the agency responsible for registering businesses in the UK. However when you click the link, it wouldn’t take you to the verification page of the agency.
This means that there is no evidence that Cloudminers.uk is a legitimate company authorized to render financial services.
False Declaration of Commencement Date
On the site, the company claimed that it started operation on January 1, 2015. This sort of claims is common with fraudsters as they create impression that they’ve been operating for a long time and so are dependable.
This contradicts the reality as a Whois search shows that Cloudminers.uk was registered as a domain on January 17, 2019. This means that the site is just about a month old and so does not have an online reputation.
Also, the fact that the owners are hiding their identity and claiming what they are not is a red signal that this is a site to be avoided.
Outrageous Claims of Profit
There’s a saying that if it is too good to be true, then it isn’t true. A promise of instant riches is a technique that scammers routinely use. Cloudminers.uk present investment plans that overnight riches such that the basic plan offers 120% profit in just 24 hours. Higher plans offer even higher profits of up to 250% while demanding a deposit of $5000.
Obviously, the only people that would be sucked in by this type of scam are the uninformed and greedy.
An Affiliate Program – Quest for More Publicity
Naturally, scam projects target more people by promising affiliates some reward to motivate them to publicize the project. Cloudminers.uk has a 4% referral commission for its affiliates while Representatives earn 6%.
The reason for this type of referral system is to use people who didn’t put in their own money to bring in investors who would eventually be the losers in the scheme.
Sometimes, scammers may pay the early investors to create the impression that they run a legitimate company. This would motivate the paid participants to spread the news about the company’s legitimacy but the target of scammers is to gain more deposits as people trust them.
Down the line, they’d abruptly stop making payments when they have accumulated funds. They simply shut down the site and exit leaving the participants mourning their losses.
The losers in most of these Ponzi schemes are the new investors and those that trusted the site and sent large sums of money. This is why Ponzi schemes, pyramids and all such scams should be avoided.