Analysts discover $800M in Ether ‘recycled’ to pump’s EOS ICO

The pump scheme "created a false impression of value of the token, which enticed others to want to purchase"'s ICO, said analysts.’s record-breaking initial coin offering (ICO) for EOS in 2017 — which netted the blockchain firm $4.2 billion — was just an elaborate pump scheme, claims new research.

The 14-page report, published Tuesday by financial analysis company Integra FEC and shared by Bloomberg, highlights suspicious trades that manipulated the price of’s EOS token and lured eager crypto investors.

According to Integra, the scheme saw the equivalent of $814.6 million in Ether “recycled” between potentially connected exchange accounts.

The ETH funded purchases of newly-minted EOS via’s crowdsale.

Whoever controlled the accounts then “quickly and repeatedly” sold their EOS for Ether. Those trades often occurred within minutes of each other, before the pumpers used the proceeds to buy more EOS.

As detailed in the report, the strange activity set alarm bells ringing for a number of reasons.

For one, the Ether was moved to exchanges in a complex way. This was presumably to render tracking the funds as difficult as possible.

  • The accounts typically sold their EOS at a loss.
  • They often bought and sold similar amounts of each crypto every trade.
  • Purchases amounted to far more than the standard $10,000 — sometimes in excess of $15 million.
A visual breakdown of how the pump worked (source: Integra White Paper: Were ETH and EOS Repeatedly Recycled during the EOS Initial Coin Offering?)

University of Texas finance professor John Griffin, who led the research, said:

“The suspicious accounts created legitimacy and the perception of wide-scale interest in EOS, and thus were able to make EOS move from an obscure ICO to become a token of widely perceived value.”

Griffith described early demand for EOS as “seemingly artificial,” and said it had two effects. First, the phoney buys manipulated EOS’ price higher than if all trade were organic.

“Second, it created the false impression of value of the token, which enticed others to want to purchase the ICO token,” added Griffith. funneling ICO funds to its own crypto exchange is reportedly using money raised in its controversial $4.2 billion token offering to help launch Bullish, its supposedly EOS blockchain-powered crypto exchange.

Bullish is currently valued at around $9 billion, according to Bloomberg. The exchange has received additional funding from a number of the same investors who backed

Prominent billionaires throwing cash at Bullish include PayPal co-founder-slash-blood boy fan Peter Thiel, Moore Capital chief Louis Bacon, and Apeiron lord Christian Angermayer.

EOS is yet to return anywhere near its record highs despite Bitcoin and Ethereum’s recent movements.

Read more: [Dan Larimer raised $4B to build EOS — now he’s gone] intends to take Bullish public later this year. Although, whether these pump and dump revelations will have any effect remains to be seen. says Integra is mistaken but won’t say how

In response to Integra, cited another report by London law firm Clifford Chance which “found no evidence of any arrangements between and third parties by which third parties bought tokens on’s behalf.” commissioned that report (which came out earlier this year) to refute persistent claims that it bought its own crypto throughout its year-long ICO.

The company also claimed Integra’s study “makes many errors in fact and logic in pursuit of a false thesis that can be easily disproven with publicly available information.”

However, never specified what those alleged errors might be.

In any case, this report is by no means the first time has come under scrutiny. broke records for the biggest ever ICO (Source: ICOBench via Bloomberg)

Read more: [Crypto investors out-settle SEC, snag $27.5M from over EOS]

In 2019, the US Securities and Exchange Commission fined the company $24 million for failing to register EOS with regulators. settled without formally admitting to the charges.

And in June, the company settled a class action lawsuit for $27.5 million over allegedly false claims made to market EOS.

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