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