Dubai Coin: a story of cryptocurrency fraud in the Gulf countries

    22 Jul 2021
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    DubaiCoin positioned itself as a regular cryptocurrency, specialized for the UAE market. Its DBIX tokens were traded on various exchanges, and the roadmap looked quite attractive. But it was all a scam.

    In May of this year, the attention of the cryptocurrency community was drawn to the DubaiCoin digital currency (DBIX token). As stated in advertisements and numerous commissioned articles, it was launched by Dubai, the largest city in the United Arab Emirates. They also said that in the future DubaiCoin was supposed to become both a full-fledged payment instrument and an investment asset. Another thing mentioned was DBIX’s improved functionality in terms of security and efficiency, which allowed to optimize money transfers and international payments.

    It must be said, project’s cover was worked out well. DubaiCoin was developed by ArabianChain Technology, according to which the new digital currency was the debut public blockchain in the United Arab Emirates. As stated in the project prospectus, soon it would be possible to pay for goods and services using DBIX, both online and in brick-and-mortar stores. Control over the circulation of the new cryptocurrency was supposed to be carried out by both the city and the authorized brokers.

    When it comes to technical details, the task of DBIX was said to be ensuring the operation of the ArabianChain platform as the first public blockchain in the Arab world which made it possible to execute smart contracts, create and launch decentralized applications. The cryptocurrency used the Proof of Work consensus mechanism based on the Dagger-Hashimoto algorithm.

    Here’s another curious excerpt from the ads: “The coin was created back in 2016, but it didn’t lead to any noticeable cryptocurrency boom in the Arab world at the time. The fact of the matter is, Muslims take their religion very seriously and do not use any innovations without religious approval. Such permission was only granted in the first quarter of 2018, when it was officially announced that cryptocurrencies in general comply with Sharia law and any religious Muslim is allowed to use them freely. The event coincided with the market correction, so there has not yet been a large infusion into the industry from the Arab world. However, as soon as the market goes “bull” again, Muslims will become active investors, as now they are not hindered by anything.”

    The turning point in this whole story happened at the end of May, when the value of DubaiCoin jumped up 1 dollar from 15 cents to $ 1.15. The price held at this level for a couple of days, and many hamster investors actually ended up buying DBIX tokens. They could be bought on Livecoin, HitBTC and Cryptopia platforms.

    Then, on May 28, the Dubai official press service stated that the emirate does not have its own digital currency, and the organizers behind the Dubai Coin project are scammers aiming to steal user data and money. “The website promoting the coin is an elaborate phishing campaign designed to steal the personal information of the users, – the press release said. – Dubai Coin was never approved by any official body.”

    This official statement was a forced step – a response to the ArabianChain Technology announcement of the alleged creation of “Dubai’s own digital currency” DBIX. Shortly thereafter, the text of the announcement became unavailable, and the token was removed from popular market data aggregators. Major listing platforms CoinMarketCap and CoinGecko have also removed Dubai Coin from their pages.

    Following that, the ArabianChain Technology blockchain company claimed it did not publish a press release about Dubai Coin, and called the site listed in it “fake and fraudulent”.

    There is still no precise information about the number of victims of this fraud, nor the amount of losses; there is not even information about an investigation being carried out by law enforcement agencies in any country. However, the story itself stands out, as it showcases traditional approaches of cryptocurrency scammers. First, declaring your entrance into a very “rich” market, not yet settled by the cryptocurrency business. (The Gulf region was just that.) Second, “explaining” why this particular cryptocurrency will soon become a massively used means of payment. And third, manufacturing excitement. For example, all the advertising said that the main drawback of the crypto coin is the small number of tokens in circulation (about 2.2 million). You don’t have to be a particularly good psychologist to realize that this is a simple trick to instantly increase demand for a “rare coin with great potential.”

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