- Investors can't withdraw funds from Cryptonomy.
- UK regulators issued a scam warning to crypto investors.
- Many features on its site, including the logo, appear copied or fake.
A crypto investing platform which claims to offer annual returns of 180% is facing an outcry from investors who say they can’t withdraw their funds.
Cryptonomy, which is in the process of rebranding to Nomy Finance, says it has made $194 million for investors by investing in early-stage crypto projects.
Yet there is no evidence that it ever made any such deals.
The platform, which appears to have copied its logo from a popular DeFi project, touts executives on its website who don’t appear to exist.
And it has doctored photographs of employee meet-ups from other crypto projects and passed them off as its own.
Locked out
Five investors who spoke with DL News say they deposited hundreds of thousands of dollars worth of crypto with Cryptonomy and locked up their funds in fixed-term contracts to earn a return.
But when the contracts expired and they tried to withdraw their deposits, they say the platform locked up their funds again without their permission.
“I am 100% shocked that a government entity isn’t investigating them,” one investor who deposited $50,000 worth of crypto told DL News.
“I have reported them to three agencies and I’m not stopping.”
Cryptonomy did not respond to multiple requests for comment.
‘You should avoid dealing with this firm and beware of scams.’
— UK FCA
Not much is known about Cryptonomy or the people who run it.
The platform’s website previously linked to a UK Companies House registration for a company called Cryptonomy Finance Ltd., which listed a London address that also houses a WeWork.
Cryptonomy claims to be a “fully regulated” financial entity that provides insurance and regulatory disclosures upon request to verified users.
On January 29, the UK Financial Conduct Authority warned that Cryptonomy was not authorised by the regulator.
“You should avoid dealing with this firm and beware of scams,” the agency stated.
Australian financial regulators also cited Cryptonomy Finance on its investor alert list.
The Cryptonomy website and email services are hosted in Russia, according to a forensics investigation conducted on Hybrid Analysis, a malware analysis service.
A web hosting check conducted on SecurityTrails, a cyber forensics platform, found that Cryptonomy’s mail servers are hosted by Scalaxy B.V., a Russian web hosting provider.
Scamlytics, a web security platform, lists web traffic coming from Scalaxy B.V. as a potential fraud risk.
Five investors
It isn’t clear how much money Cryptonomy has accepted from depositors, nor how much it is withholding from them.
The five customers who spoke to DL News invested a combined $568,000 worth of crypto.
Those investors spoke to DL News on condition of anonymity because they feared repercussions from Cryptonomy for speaking out.
Cryptonomy, which pitches “your investments, your freedom” on its site, has threatened to block access to accounts after customers complained publicly that they couldn’t withdraw funds.
“My Cryptonomy account has not been blocked yet, and I would prefer to keep it that way, just in case there is a glimmer of hope that I can get any money back,” one investor, who asked to stay anonymous, said.
Those investors are joined by almost 200 more who took to consumer review site Trustpilot to share similar stories.
Poor reviews
A November review from a user called Shalonda Joye said that Cryptonomy had locked up her family’s funds when she tried to withdraw them to pay for her cancer treatment.
Trustpilot has since added a disclaimer to Cryptonomy’s review page, informing users that the organisation is breaching its terms by displaying content in a way that could be misleading.
“This could look like showing an inaccurate star rating in sales materials, displaying reviews they’re not permitted to use on their site, and more,” Trustpilot said.
Investors told DL News in interviews that Cryptonomy has repeatedly threatened them with legal action if they complain about the situation.
A crypto influencer called DCA Crypto, who said he advertised for Cryptonomy, stopped after hearing reports that investors couldn’t withdraw their funds. He said on YouTube that he was threatened.
DCA Crypto did not respond to a request for comment.
Cryptonomy has repeatedly accused investors seeking their funds of not being real customers, and orchestrating “coordinated spam” attacks against the platform, according to comments made on Trustpilot.
‘The chat keeps telling me it will be expected next month. The next month comes and nothing happens.’
— Cryptonomy investor
All the investors who spoke to DL News said they found out about the platform via paid video promotions from crypto influencers.
“I first heard about Cryptonomy through a crypto YouTube influencer Thinking Crypto,” one investor said. “I’ve watched him for years and considered him a stand-up guy.”
Thinking Crypto did not respond to a request for comment.
Despite the endorsements, many investors were still wary. One said he tested the water with a small deposit first.
“The contract completed on time and I was able to withdraw my initial deposit,” the investor said. “That made me feel comfortable.”
100% return
Cryptonomy offers what it calls crypto staking. Investors are invited to lock up their assets for fixed periods ranging from one to twelve months.
The Cryptonomy website advertises that if investors deposit one Bitcoin they will receive over two back after a year of staking — a more than 100% return.
However, there’s no indication that deposited assets are actually staked. Many of the assets Cryptonomy accepts, like Dogecoin and Monero, cannot be staked on their respective blockchains.
Onchain records show assets invested with Cryptonomy end up at Kucoin, a Seychelles-based crypto exchange.
Kucoin told DL News that for any suspicious cases, it will assist and cooperate with law enforcement agencies if asked.
Nevertheless, the investor who was emboldened by his initial success deposited a greater sum for a term of one year.
Things started to go wrong when that contract expired and he tried to withdraw.
Cryptonomy kept automatically extending the contract, preventing him from withdrawing his funds. He contacted the customer support chat, to no avail.
“The chat keeps telling me it will be expected next month,” he said in an interview. “Every time. The next month comes and nothing happens.”
No records
Cryptonomy’s website is filled with red flags.
For starters, the company’s logo is very similar to that of Compound’s, the well-known DeFi lender. Records show Compound started using the logo in 2020. The earliest evidence of Cryptonomy using the logo is in 2022.
The company’s website lists two executives: Chief Community Officer Nitika Friedlander and Chief Product Officer Pratik Foster.
Yet there are no records of either Friedlander and Foster on LinkedIn, X, or other sites, which is odd for executives with a fiduciary duty to thousands of customers.
What’s more, the Cryptonomy website is filled with stock promotional photos of unnamed people edited to include the Cryptonomy logo and branding.
In one, Cryptonomy doctored a picture taken at a BNB Chain developer meet-up by replacing the branding with its own. The picture has been taken down.
As Cryptonomy comes under fire from customers, it appears to be morphing into something new.
In February, Cryptonomy changed the name on its X account to Nomy Finance, which uses a similar logo to Cryptonomy.
Cryptonomy’s group chat on Telegram, the messaging app, blocks users attempting to join it from a UK IP address.
Even so, the newly named platform is already drawing scrutiny.
Hybrid Analysis, the malware analysis service, reports the Nomy Finance website as malicious and gives it a threat score of 75 out of 100.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.