Miner One, Failed ICO or Blatant Fraud?

With Envion still battling it out in courts, Miner One the next crypto-mining scandal on the horizon?

Miner One, is a cryptomining startup operating in Lithuania and headed by Lithuanian resident Pranas Slusnys.

The company’s primary focus is mining Bitcoin, part of which is converted to Euro to pay operating expenses and the remaining profit is converted to Ethereum and sent to investors in monthly payouts.

What began as an ideal investment – a company operating out of a factory in Lulea, Sweden with close proximity to well known tech giants like Facebook – has turned into a nightmarish ride for investors, who in the recent weeks have been loudly voicing concerns over doctored photos and moving the operation to the Ukraine.

Miner One showed great promise in its early stages as it met its Small Cap (minimum funds required to begin operations) within the first week of launching its fundraising campaign in February 2018.  However, a thorough review shows that this is where the promises ended.

The White Paper stated that as soon as the Small Cap was met, the funds would be converted to FIAT, aka paper money, in order to make the first purchase of mining equipment.  Instead, investors learnt that all funds were held as Ethereum (ETH) until May 2018 at which time they were all converted at once for a total of $4.5M USD.  According to ICO Bench, which posts statistics on ICO’s, the amount raised was $9M USD.

At a time when the first order of equipment should have been arriving and the second order should have been getting placed, Pranas Slusnys and staff were just placing the first order.  This was not the only indicator that something was amiss.  The factory idea was replaced with containers.  Plans to move to Sweden were replaced with staying put in Lithuania.  On August 21, 2018, after many weeks of Pranas Slusnys telling investors the equipment would arrive “next week” and miners will begin operating “soon”, the crypto miners were finally switched on from inside containers at an undisclosed site in Lithuania and first payouts were promised to be made to investors on August 31.

In late November 2018, mining was placed on hold as the costs to mine outpaced the profits generated.  This crippling news came just weeks after the last of the ICO funds were used to purchase more miners.  Investors were sent spiraling again as their hopes of finally seeing decent returns disappeared before their eyes.

In early December 2018, an email to investors stated the recently purchased Antminer S9’s had finally cleared customs and been delivered to the site for set-up in 10 more containers.  This meant there were now 4620 miners in 12 containers waiting for conditions to improve so mining could start again. Pranas Slusnys gave investors hope with an announcement that they were negotiating cheaper electricity at another location.

Anxious investors first politely requested pictures and video of the equipment.  Even if it was not running, they wanted to see the potential that existed with their own eyes.  These polite requests turned into fierce demands as Pranas Slusnys and staff brushed off the investors with promises of “soon” and “next week” followed with lame excuses (the weather is bad, the professional photography crew is out of town).  

A newsletter was released containing pictures of the mining containers the miners were housed in and a proclamation that cheaper energy had been found.  Unfortunately for Pranas Slusnys, this newsletter only enraged investors more.  Keen observers pointed out anomalies in the photos and declared them to be photoshopped fakes. 

Those knowledgeable about crypto mining pointed out that the 10% reduction in energy costs that was contracted for was not sufficient savings to resume mining.  Numerous investors chimed in with statements against a move to Ukraine, pointing out that it was an area rife with political instability and had been in the headlines numerous times over occurrences of theft and seizure of mining equipment.  

On January 29, 2019, in an effort to regain investor confidence, Pranas Slusnys quickly distributed a one question, multiple choice online survey regarding the move to Ukraine to investors.  The window to respond was closed in 48 hours, yet the results were delayed until February 4.  In a final affront to its investors, Miner One sent out an email.  It contained 2 new pictures of the containers (still believed to be doctored, still nothing showing what was contained within), an income and expense record (also believed to be falsified), and a statement that the majority of investors agreed with moving to Ukraine and that the move would begin on February 5.

In the days following this announcement, it has been eerily quiet on Miner One’s Telegram channel, where investors go to chat with one another and to ask questions of Miner One’s support staff.  Support staff rarely makes an appearance.  A few investors express fear of what is to come. 

A recurring speculation is that sometime soon, Pranas Slusnys will send an announcement to investors that the mining equipment has been stolen causing Miner One to shut down through no fault of its leadership.  This possibility has investors wondering- was this the plan all along? Were miners ever purchased?  Where is the money?

Investors are really worried about what is going on and fear the worst:

Only time will provide them with answers. We will keep you updated.

If you have further information, do not hesitate to contact us via our anonymous whistleblower service: https://fincrimeobserver.com/whistleblower-system/