Buyer Beware: Report on Crypto White Papers Reveals Exaggeration, Plagiarism and Fabrication

An investigative report by news outlet Decrypt reveals the shady business practices that can lead to overblown white papers for blockchain and cryptocurrency-related startups.

The industry relies on white papers, the authoritative reports that explore and explain a company’s core product or offering, detailing its technologies, monetary incentives and structural framework. Investors and companies often use these reports to gauge success, forge partnerships or make investment decisions. But relying on a white paper often means trusting in a work-for-hire writer who executes instructions to pad figures, among other shenanigans.

Writes Ben Munster, reporting for Decrypt,

“…many of the writers say that they are consistently required to fabricate and exaggerate facts, and are met with an alarming laziness on the part of the companies employing them.”

Last January, Patientory, a blockchain-based health management software solution for storing global medical records, claimed a Russian company called Dentalfix, seller of tooth repair kits, had copied its white paper.

In certain instances, research analysts believe that plagiarism extends beyond the words on a page to reflect a company’s technical capabilities. According to Digital Asset Research, lifting passages or pages of text speaks to the culture of the development team and can undermine actual technology.

Reporting last year on the 2018 controversy involving Tron’s white paper, the most high-profile blockchain project to be accused of containing plagiarized content, the company wrote,

“In early January, Juan Benet, the founder of Protocol Labs, alleged that at least 9 pages of TRON’s white paper were copied from either the Filecoin or IPFS papers, both of which were co-authored by Benet. Although Justin explained this as a mistranslation for the English version, given the amount that was copied, it is unlikely to have been a mere mistranslation.”

White paper writers reportedly make anywhere from $1,000 to $50,000 for a single report.

Says writer Adefemi Yusuff Adegoke,

“Most time[s], there are cases of funding budget padding. A project that can be executed with $180k funding budget can be padded up to $450k. And they won’t report the total amount realized during ICO.”

“Most of the fraud[s] are in the miscellaneous part of the budget. Those ones go directly into the pockets of the CEO and CTO.”

Reports an anonymous source,

“I’ve had CTOs ask me to write about patented technology from another white paper as if it were my own idea, change the words a little, and then put it in a new white paper. This is patented technology in another part of the world.”

According to Volodymyr Malyshkin, CEO of Ukraine-based white paper provider Illuminates, writers are tasked with filling in the blanks, often making up whatever it is the company executives do not understand or profess to not know.

He alleges that his white papers have helped clients raise over $12 million, and says that only one out of dozens “had any real idea about what to do from scratch.”

Decrypt says it interviewed roughly 12 white paper writers. You can check out their full investigative report here.

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