- VBit Mining is offering hosted mining contracts in states where they’re banned or considered securities
- There are lots of red flags in VBit Mining’s online presence, or lack thereof
- Packages all show as loss making for investors using the VBit Mining profit calculator
Crypto scams come in all shapes and sizes, but one of the most complex crypto scams to unravel is a hosted mining crypto scam. Fortunately for you, you’ve got the wonderful team here at Fully Crypto keeping you safe and sound – how kind is that!
Today, we’re diving into the world of VBit Mining and the various hosted mining contracts that they offer clients. From the outset, something felt off, and after more digging it appears there’s more to VBit Mining than an honest hosted mining firm!
It All Started with a Press Release
Unless you’ve got a PR or journalism background, it can be rather tough to spot issues with a press release. On May 1, VBit Mining sent out a press release, but made a number of rather rookie mistakes. The most glaring mistake of all is the permissions in the Google Doc. Any seasoned PR expert or journalist knows that press releases should be sent out in a manner that 3rd parties – such as news houses like Fully Crypto – can only read.
Instead, VBit Mining changed the settings so that anyone with the press release can edit the document, change permissions and even ban people from viewing it – a rather glaring mistake. This is what piqued our interest in VBit Mining, and led to our discovery.
Cloud Mining is a Grey Area as it Is
In the United States, a number of states have actually warned against cloud mining contracts. For example, in Texas, cloud mining contracts have not been approved for sale, causing a number of firms selling cloud mining contracts in the state to be issued with cease and desist orders. Interestingly, you can sign up as a Texan resident and buy hosted mining packages from VBit Mining.
Over in South Carolina, its securities commissioner has declared cloud mining contracts as securities, meaning the firms selling these contracts are required to jump through a lot more regulatory hoops. These are just two states that have taken this stance, causing many to wonder whether cloud mining should be allowed for all or sold as securities under US SEC regulations.
While VBit Mining is a hosted mining company, there’s plenty of opportunity for VBit Mining to combine everyone’s hashrate together and mine as one giant pool, so do bear this in mind if you opt for a hosted mining package.
Dubious Client Success Stories
When you’re digging up a potential crypto scam, or are looking to invest, your first step should be checking out the company, covering every kilobyte of data that can be found. Given that VBit Mining was up and running in December 2018 – according to testimonials on the VBit website – there is actually very little out there about VBit Mining.
For a company that’s pushing two years old, there should be more of a digital footprint, and the reviews are far too squeaky clean. The reviews on the VBit Mining’s website are stuffed full of keywords, something that regular people wouldn’t do on purpose. Next up, the photos of allegedly happy customers seem rather familiar. Queue the VBit Mining’s Facebook cover image. Zoom in a bit and you will be able to spot a few familiar faces in the crowd, which doesn’t look overly happy to be having a team photo. This is a huge red flag and we’ve seen a number of other high-profile crypto scams use this tactic.
A CEO That Doesn’t Like Social Media
CEOs are usually CEOs for the reason that they’re smart, thought leaders and are capable of taking a product and turning it into a profitable business. VBit Mining’s CEO is allegedly called Danh Vo, and according to LinkedIn this is correct. However, the LinkedIn profile of Danh Vo is rather bare and doesn’t include a simple profile picture – something that’s often linked with scammers. Aside from that, Danh Vo doesn’t appear to be on any other social media platforms and doesn’t interact with the company’s Facebook page. In the one photo we have of the man that’s allegedly Danh Vo, he appears to be mid to late 30s, and typically these types of CEOs are incredibly active on corporate social media.
Classical Scammy Posts
If you’ve been in the crypto world long enough, you know the biggest red flags of a crypto scam, and unfortunately one of these flags is waving at us on VBit Mining’s Facebook page. A man named Bin Y. Zheng who is apparently a Regional Leader at VBit Mining posts those ohh so lovely “real” screenshots of an email inbox with mountains of Coinbase deposits.
These are one of the biggest red flags you can ever see in the hosted mining world, and anyone that has ever posted one of these on social media or in Telegram groups has turned out to be part of a scam. So, do bear this in mind when you’re thinking about investing with VBit Mining.
Is VBit Mining a Scam?
We’ve done the leg work and the digging and there are so many red flags it’s crazy. But, as the old adage goes, innocent until proven guilty stands here. If you’re wise, you’d steer clear of VBit Mining and any other hosted mining products out there as they’re wildly unprofitable and are high risk investments.
The Black Diamond package is $25,000 in an upfront payment, with another $25,000 spread out over 36 monthly payments, but the expected returns according to VBit Mining’s mining calculator states that you will only earn $2,229 a month. This means that you’re going to need to mine for just under 12 months before you break even on your initial investment. Do bear in mind that with the Bitcoin halving just around the corner, the block reward will half, meaning you will earn half as much Bitcoin.
The VBit Mining profitability calculator states that your expected returns are based on a 12.5 BTC block reward. When this becomes 6.25BTC on Tuesday, your potential earnings will effectively be halved, meaning it will take you twice as long to break even. That’s right, you’re looking at two years before you break even – and that doesn’t even factor in variables such as increased difficulty levels and aged equipment. In two years time, the Antminer S17+ will no longer be one of the best ASIC mining rigs out there, and you could be forced to cut your losses or fork out extra cash to buy new mining rigs for your hosted mining plan.
Finally, don’t forget to factor in the additional maintenance, service and electricity fees that you will be hit with along the way – it’s not as simple as give VBit Mining $50,000 and you’ll make instant profit. If you elect for VBit Mining to host your mining rigs, you will need to cover the cost of electricity, maintenance and any service fees that will pop up, all fees that will delay your time to profitability.
More and more states in the US are classifying cloud mining contracts as securities, so do bear this in mind if you feel like risking a bunch of your own money. There’s definitely something funky going on at VBit Mining – approach with caution.