WaterMine Ponzi Scheme

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WaterMine

WaterMine was supposedly a cloud mining platform where users purchased mining packages. In reality, there is no evidence that any mining actually occured, and the packages beared strong similarities to other panzi schemes. After running for over a year, the website claimed that they were hacked by a support worker. The website is presently offline.

This is a global/international case not involving a specific country.

About WaterMine

"WATERMINING IS THE MOST ADVANCED TECHNOLOGY. Low energy consumption - high efficiency."

"Watermine Company is a team of professionals and an online platform for generating income from investing in cryptocurrency mining."

"Our company deals not only with crypto-currency mining but also with their trade on international exchanges. The popularity of crypto-currency and the increasing difficulties in obtaining it increase the popularity and demand for crypto-currencies in the markets and in general. Therefore, sales of digital currency are very profitable for us, and this kind of activity brings us and our investors a decent income."

"Our service makes mining accessible to everyone. We believe in the future of cryptocurrencies and we love to be part of this growing community. Our dual mining system is suitable for those who are new to the world of cryptocurrencies and looking for easy way to invest money." "Find a plan that is right for you! OUR MINING PLANS OVERVIEW."

"Watermine Corporartion LTD offering 4 levels referral program. Earn up to 20% from your referrals."

"The activity of our company is aimed at the forex, stocks and cryptocurrency trading and providing investment services worldwide. Any kind of investment activities and fiduciary management services are carried out on legal grounds." "The legality of our company's activities can be judged by the presence of all registration documents and licenses allowing us to attract private investment." "[W]e have taken all possible measures to protect customers' personal information from getting to third parties. We are using the strongest DDoS protection in the industry with 100% up-time guarantee. Transfer information from and to our website is realized and ciphered by SSL Encryption." "Customer trust and deposit protection are guaranteed by the creation of a reserve fund, which under adverse circumstances will become a source of fulfillment of our financial obligations."

"Watermine is a scam that does not do any cryptocurrency mining. It is an illegal Ponzi scheme that is going to collapse, and all the money will disappear. Stay away from it!"

"According to their traffic stats, they were in a huge decline after February 2021 and simply just ran out of money."

"Watermine will be discontinued We have worked night and day the last 3 days to make everything functioning again, but it has been nearly impossible to solve in such a small time frame. The hacker has gathered a lot of data, they are requesting payouts if we continue. We do not believe its impossible to solve, but we need minimum of a month. Ninety percent of Watermines' users can not wait. Our name has been tarnished on trust pilot. Many users are saying add more team members to speed up the process, as we are very leery of adding new team members. We will try to pay manually to those who are not in profits. Please stop Watermine promotions. Ending like this very painful for Watermine team and loyal investors. Watermine was making millions for investors. We had no intentions of closing this amazing opportunity . Please forgive us"

"Pretty sure watermine just official took off.. hope I’m wrong I never invested into it but I have too many friends that did.."

"I just lost a bunch of money with Watermine. They did disappear, and started a new website, looks identical to the original, but just changed the name to “king finance” or something."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - WaterMine Ponzi Scheme

Date	Event	Description
May 11th, 2021 10:59:39 AM MDT	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Experienced cryptocurrency users can typically tell what's fraudulent, however this takes practice, so it's always best for new participants to err on the side of caution, and avoid investing in most services.

To prevent such ponzi schemes, our framework provides that 2 industry reviews should be conducted of each proposed new service, by knowledgeable organizations. Regular reviews should also be conducted to ensure that all customer assets are fully backed, which prevents ponzi schemes since the key component is that funds are no longer backed.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.