Escobar - An Immense Tech Scam

 

Escobar – an Immense Tech Scam


Have you heard of the name Pablo Escobar? He was one of the biggest criminals of all time. In 1993, he was killed in a shootout and the US government had tried to retrieve all his wealth. However, it seems as if a lot of the money was still untouched. In 2015, a company named Escobar.INC. Inc was registered. It claimed to be founded by Pablo Escobar’s bothers with the leftover wealth. However, this company not just another regular tech company.



The company is not bothered to show any kind of subtlety here. They are proudly claiming to be managing the assets of Pablo Escobar and growing them. They have tried to highlight all the disputes they have fought through on their website. Including lawsuits by giants like Apple. However even the way Escobar.INC has tried to grow its wealth is unique. Usually, companies just try to design better and more unique tech products. They hire engineers, designers, marketers etc. Almost all of them manufacture their own products, but Escobar.INC has tried to take a different path here, i.e., scamming people.

Escobar launches products that seem to be a replica of infamous products from brands like Samsung and Apple. One of their scams was of Escobar Fold 2. This was a complete replica of the Samsung Z fold 2. Just coated with a layer of gold and half its price. The product website or marketing doesn’t seem to have any hint of collaboration with Samsung. However, this wasn’t even its biggest problem. Once a lot of pre-orders and orders were taken. Escobar.INC just never shipped its phones. No paying customer received a single device they ordered. This justified the low price point set by them. A year later they launched another smartphone called – Escobar Gold 11 pro, and as the name might tell you, it was a replica of the iPhone 11 pro. However, this time the company has publicly disclosed that the product is a refurbished iPhone. They claimed that Apple products are overpriced, hence they were willing to repair the old broken iPhones to new remodelled ones and sell them for half the price. But as seen previously, not a single product was ever shipped to a paying customer.



Now you might think how such a cliché scam would work. Wouldn’t people stop buying the products after seeing the first scam? Well Escobar adopted a very clever strategy. They tried to filter the orders from tech influencers, youtubers, reviewers and basically anyone who might have a huge audience using their addresses, email etc. and shipped these orders. This fooled many of these influencers into thinking that the product must be delivered to everyone. Many of the youtubers created fake profiles with made up names, addresses etc. to see if their product would be delivered, and as expected it was not. By the time the regular users were alerted, they had already ordered the phones, delighted to receive the device for almost half the price. Escobar successfully escaped with all the money.

Recently, Escobar started their new tech scam, this one did not include any refurbished phones or remodelled devices. Escobar has just started printing money. They call it the Escobar cash. The basic idea behind this is having a hybrid cryptocurrency. They want the users to have the mental assurance of having their money physically as well as give them a chance to enjoy the benefits of cryptocurrency. The notes store some digital information in the form of a QR. Which when scanned using the Escobar cash app, gives us the option to use the money as cryptocurrency. Escobar has basically made a fork of a widely known crypto, ripple (0.8USD), known as Escobar cash (ECH).



According to Escobar, we can store the crypto as physical notes, and redeem them when we wish to sell it. Now on paper this might seem to be a very ingenious approach on cryptocurrency, be practically have a way to store our cryptocurrency physically without any 3rd party digital wallets, but based on the history of Escobar, we know that this all is a well-designed scam.



Firstly, the notes store all their value in crypto, hence they do not have any value once their QR is scanned and the balance is redeemed. So, basically the very concept of physical cryptocurrency seems to be impractical. Let me put it this way. Regular money can be used infinitely many times for transactions. It will always retain its value as long as it’s not torn, scratched etc. However, physical cryptocurrency like ECH loses its value as soon as it’s redeemed for a digital transaction, so after this the money is basically useless. Hence, we can consider this cash as a gift voucher not as a currency or a medium of exchange.

Now as we have seen that it is useless as a form of physical currency however, even digitally, the currency is currently useless. It not listed on any of the exchange platforms, it can’t be traded for any money or other crypto. No crypto wallet currently supports it. Further, even the Escobar cash app isn’t redeeming the data from the notes. So just to put it plainly, currently Escobar cash is nothing more than useless game money.


Let’s understand how they are actually making any profit out of this ridiculous scheme. The first idea might be that this is a strategic pump and dump scheme. Basically, the company creates a cryptocurrency, lists it in the exchange platforms, hypes it so much that the people start inflating its perceived value, once the price bulges they sell all the crypto they had bought when its value was zero, and finally dump the whole thing. By this process people have turned a few thousand to hundreds of crores of rupees. 

Another simpler approach to the scam is, to never list it anywhere, so anyone who buys the physical notes will be left with useless pieces of very expensive paper. In this way, the people would have already bought the cash before realising that it is completely worthless.

To summarise, the money has no digital form of storage whatsoever, and its physical value is also hanging by a thread. It can’t be used as a form of exchange, loses all its value when scanned. However, in future, it is possible that its digital side gets developed and price inflates for the pump and dump scheme we saw earlier. This whole concept seems to be very enticing but in the world of growing cryptocurrency and blockchain, but we should always keep an eye out for any such traps. What do you think? Share your thoughts in the comments. Thank you for reading. 

Written By - Aneesh Agarwal

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