The McAfee Coin ICO will quite possibly go down in history as one of the greediest and most cynical attempts to exploit cryptocurrency users – if you discount scams, of course.
John McAfee has a fascinating and colorful history. He made money from his anti-virus software before a stint in Belize working on antibiotics – he left the country after police sought to question him in connection with a murder.
By 2016 another company, Future Tense Capital, was operating as an incubator. Since then, he’s offered to “eat [his] own dick on national television” if Bitcoin doesn’t jump to $500,000 by July 2020, he failed to win the candidacy for the Libertarian Party in 2016 shortly after a DUI in Tennessee, and Johnny Depp will play him in an upcoming movie.
An in-depth series of interviews by Jeff Wise, published in ‘Psychology Today’, claim that McAfee is “a master manipulator” and charts his ‘outrageous tales’ while being ‘careful not to use the word psychopath‘. Wise notes that the day before the unsolved murder of his neighbor, McAfee’s ‘beloved dogs were found dead, poisoned’.
This man wants $1 billion of your money to play with.
Yes, billion, with a B. (We think – see below.)
Let’s move on to the offer itself. While McAfee is a man who has been, and will be, studied for many years, his role in this venture is yet to be discussed.
McAfee Coin ICO Purpose
McAfee Coin AG (a proposed name, not registered) consists of two existing companies: McAfee Hangzhou Crowdchain Accelerator Inc. (McAfeeXL) and McAfee Beijing Crowdchain Technologies Inc. (McAfeeCC).
It purports to be a complete investment platform that will provide capital to those seeking to launch an ICO, channel crowd wisdom into investment decision-making (similar to Cindicator, which has a working app and a strong series of financial partnerships already) and of course, create artificial intelligence bots, and so on.
Specifically, it intends to engage in these activities in China. And – wait for it – there’s time for some of McAfee’s trademark fuck-you attitude here:
“We embrace rational regulatory frameworks and advocate compliance over circumvention. But we also embrace this technology and believe that attempts to crush it are misguided and will fail. A middle ground must and will be found.”
Must and will! Yeah, China! Boo-yah! Problem solved!
Of course, the problem is NOT solved, and the rapidly-changing landscape for cryptocurrency is not suited to hard and fast statements that are little more than rebel yells. This statement should never have been included on their website – challenges to financial authority are, we understand, rarely successful in China. Even a little deference to the country’s culture, rules, and regulations might be a better way to start a governmental relationship.
The McAffee Coin ICO is also designed to raise funds for an incubator to identify and support the next “blockchain unicorns” through McAfeeXL – a niftily-named accelerator that exchanges equity for investment and, in some cases, coaching from entrepreneurs etc.
McAfeeCC, another element to the overall venture – the presentation discussed the notion that “Token sales are quickly becoming an important way for blockchain based businesses and organizations to raise funds for projects through token crowdsale,” which strikes us as being an excellent piece of advice back in January 2017.
Some funds from the McAfee Coin ICO are set to be allocated to an “in-wallet exchange” which will seek to allow users to transfer funds between McAfee portfolio companies seamlessly and without charge. Given the limited ecosystem that even a venture of this scale can aspire to, we see limited benefit to this feature.
McAfee Coin Roadmap
Ignore the first four items on the roadmap if you visit the site – they’re about publishing posts on Steemit in 2016, discussing the venture in June 2017, and opening offices in July and August. These posts, in this author’s opinion, are designed to suggest that the coin is well thought-out and has been under development for a considerable period of time. In fact, nothing of value is mentioned (other than ICO dates, interestingly referred to as an “Interactive Coin Offering”) until 2018.
Deliverables include launching the wallet in Q1 and the ‘Social Investment Network’ and ‘ICO Platform’ in January; mentorship programs in Q2 and Q3; and then in Q2 of 2019. Everything else on the roadmap is devoted to funding (more on this in a moment) or building out the team. These are nebulous goals and don’t reassure us at all.
However, there are two ICO launches scheduled – they could be of more interest. In February 2018, Actuality and IHT Real Estate Protocol, both of which McAfee Coin has partnered with, will launch their ICOs. Four members of the McAfee Coin ICO team are also listed on the Actuality page – it’s a VR shopping company founded in 2012 that appears to have an established customer base.
IHT is another real estate play, which states that “Through IHT’s smart contract, large real estate can be split and distributed to financial institutions”. It features McAfee and CEO Yale ReiSoleil as advisors; Ricky Ng, listing digital advertising as a core competence, is on the team in all three companies.
Either or both of these ICOs might make money, and since we don’t know the extent of the McAfee company’s association with them, there’s little point in speculating how much or how little.
The McAfee Coin Team
We’ve discussed John McAfee at some length, and as Co-Founder, Director, and Chief Cybersecurity Visionary that seems warranted. Also, his name’s on the coin. We don’t see ourselves spending Washingtons, Windsors, or Hapsburgs… but there you go. Different times.
Yale ReiSoleil is the Chairman and CEO. He manages a $30bn medical fund, according to his LinkedIn profile. Immediately upon forming the McAfee venture, he wrote a post in which he states “I am back to Facebook and LinkedIn. I deleted my social network presence after co-founding our HFT business, as every other HFT trader did in the past few years.” So, not much to go on there.
Other members of the team, including the ubiquitous Ricky Ng, have well-rounded and accomplished profiles. Alexander Borodich, Director of Tech, also appears to have a well-established presence in the startup world as founder of VentureClub.co, a crowd investing platform.
The McAfee Coin ICO Token (MCF)
An ERC20 token on the Ethereum platform, McAfee’s MCF token is compatible with any wallet, not just the native one proposed by the company. And now we feel we must quote directly:
In the McAfee ecosystem, the tokens play several roles:
- Represent the investment capital for portfolio company equity investments.
- Function as the fundamental unit of account on the McAfee Coin blockchain. McAfee Coin is a liquid currency, and therefore can be bought or sold on exchanges, as well as transferred to other users as a form of payment.
- Provides a reward mechanism on the McAfee Social Investment Network.
That’s it. That’s what you get for your money – at least, that’s what you get UNLESS…
The McAfee Coin ICO team has been generous to allow you, dear token holder, the opportunity to profit from their successful investments. In the event that profits are realized, there are two forms of distribution.
- Underlying portfolio company tokens distribution, and
- Cash distribution.
“100% of additional net profit created will be distributed semi-annually through the distribution of ETH via smart contracts. Eligible for distribution are all McAfee Coin (MCF) token holders on a predetermined and publicly stated date.”
If we’re reading this correctly, it means that if you participate in the McAfee Coin ICO and hold MCF tokens, then the team at McAfee Coin AG (if that’s what they decide on) will, in their absolute discretion, give you some share of those profits based on your holdings. But that they will predetermine this allocation, at some point, in some way, possibly according to some formula.
Moreover – the bounties never cease! – your participation in the McAfee Social Investment Network (the crowd wisdom aspect of this) will, somewhat like Cindicator, be rewarded:
“Any new thread, new post, new comment, an upvote or a downvote can earn rewards in MCF coin. This MCF will be determined, distributed algorithmically and deposited directly onto a member’s account wallet by our Social Investment Platform.”
Once again, not a lot there.
MCF Token Distribution
McAfee Coin’s website answers one question exceedingly clearly: how will the funds be used?
“While MCF is an investment vehicle at the beginning, it is structured as more of a blockchain startup company where the company uses the assets in whichever way the management deems prudent, with full disclosure, on operating expenses, investment activities etc.”
This is a wonderful way to say “We’ll do whatever we please with the money,” especially when compared to their statement on the IOB coin (wait, two coins? Oh yes… we’re getting there.)
“MCF is to be invested in much earlier startups, while IOB is to be invested in later stage companies; IOB is closer to a traditional venture capital fund, where the investment management company, ReiSoleil McAfee Zhu Ventures LLC, has a fiduciary responsibility to.”
No such luck with MCF, which is what’s on offer now.
The IOB coin, now that we’re getting there, is a second-stage coin designed to further the investment in startup companies that successfully graduate the McAfeeXL accelerator program and show real potential. It’s essentially a crypto-capital fund, Internet of Bi, and the capital arm of a Swiss-based fund focused on China. We are unconvinced by the need for a separate coin unless there are legalities related to this relationship that demand it, in which case we are even MORE unconvinced by the need for a separate coin.
But it gets crazier. That wacky John McAfee!
There are THREE ICOs planned – the first of which is slated to raise $48M, the second of which, in Q2 2018, aims for $168M, and the third jumps in with a quick $300M in Q4 2018.
Wait, we hear you cry – that doesn’t total $1bn, and yet the token allocation clearly illustrates a billion dollars! The combined total of the ICOs should be $516M, not $1bn, according to the hard caps!
That’s (possibly) because the team at the McAfee Coin ICO School Of Obfuscatory Research has decided that they “expect” ICO prices for ICO 2 to be 20-40% higher than for the first one (which is set at 1:1 ratio, one MCF to one dollar). Therefore, by their reckoning, the second ICO should be worth $1.20 – $1.40 per token. A further expectation of value appreciation, at 100 to 150%, is expected for ICO 3 – representing a token price of $2 to $2.50.
If our math is correct, that means that $48M for the first ICO, plus the median expected appreciated figure ($168M * 1.3 = $218.4M) + ($300M * 2.25 = $675M) then it comes to a grand total of $941M.
We have no idea where the figure of $1bn comes from. We invite user feedback, or maybe John McAfee can simply insert the formula here if he decides to hack our site on the basis of this review.
What we can see, very clearly, is that the founders stand to gain 20% of the ICO funding – whatever that may total – with a further 11.4% held for advisors and partners. That’s a lot of tokens for the team.
McAfee ICO Review Conclusion
Let’s assume that the people doing the heavy lifting here are competent; that the people at the top are well-connected; that the business is above-board and compliant.
In that case, this is a mere money-grab.
There is no innovative blockchain usage to be found here. There is no need for an ICO at all, so far as we can see. Mr. McAfee and his well-heeled Chinese friends could raise the money they want via venture capital – indeed, Mr. ReiSoleil expressed that very sentiment on Telegram, saying that “We actually need your brain more than your money. If Raising money is the only issue, I don’t need to do this. I raised billions from institutional investors for my PE fund and VC funds.”
(The company also used this quote on their website:)
“When you give lots of money to someone who’s never seen lots of money before, they simply waste it.”
In other words, the CEO of the company himself admits that the real purpose of creating an ICO to raise millions of dollars, is to crowdsource information that will, in fact, enrich him and his team even more than the cold, hard cash. This, once again, isn’t necessarily a bad thing – it’s simply that before handing over money for such an enterprise, it behoves you, the reader, to educate yourself about what that money will be used for, and what your role as a token holder will be to the people you entrust with it.
The founders have created an ICO that is virtually impossible for the layperson to decipher – two coins, startups, accelerators, wallets, exchanges, token allocations that defy logic, a social network. They have then taken to a public forum to declare that this could have been achieved via venture capital.
How can that possibly reassure us in the slightest that their offering has utility for the average small speculator / investor in the cryptocurrency arena?
Or that the blockchain is the right venue for them to raise money that will simply earn them more money?
“Grandiosity and making big plans, taking big reckless chances, taking control over people, indifference to what happens to others—all can help a skilled psychopath manipulate a company’s board, management, and the entire organization.” – Ronald Schouten, ‘Almost A Psychopath’.
We leave you with a quote that may help to sum up this megabucks raise; it’s frightening to think that by simply floating the concept of a billion-dollar ICO, this team can get terrific publicity – and that by comparison, their $48M initial funding seems like peanuts.
Project Name: McAfee Coin
Token Symbol: MCF and IOB
Official website: https://www.mcafeecoin.com
Whitepaper: Available here
Whitelist date: Open
TGE Date: November 6, 2017 for pre-sale; November for crowdsale
Hard Cap: $48M, or $1bn, maybe.
Total Token Supply: 48 million, or 1 billion, maybe.
% of tokens distributed to Crowdsale: TBD
Exchange Rate: U.S Dollar
Token distribution Date: Immediately following ICO
ICO Review Disclaimer
The team at Crypto Briefing analyzes an initial coin offering (ICO) against ten criteria, as shown above. These criteria are not, however, weighted evenly – our proprietary rating system attributes different degrees of importance to each of the criteria, based on our experience of how directly they can lead to the success of the ICO in question, and its investors.
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This category accounts for the leaders, developers, and advisors.
Poor quality, weak, or inexperienced leadership can doom a project from the outset. Advisors who serve only to pad their own resumes and who have ill-defined roles can be concerning. But great leadership, with relevant industry experience and contacts, can make the difference between a successful and profitable ICO, and a flub.
If you don’t have a team willing and able to build the thing, it won’t matter who is at the helm. Good talent is hard to find. Developer profiles should be scrutinized to ensure that they have a proven history of working in a field where they should be able to succeed.
What is the technology behind this ICO, what product are they creating, and is it new, innovative, different – and needed?
The IOTA project is a spectacular example of engineers run amok. The technology described or in use must be maintainable, achievable, and realistic, otherwise the risk of it never coming into existence is incredibly high.
Tokens which have no actual use case are probably the worst off, although speculation can still make them have some form of value.
The best tokens we review are the ones that have a forced use case – you must have this token to play in some game that you will probably desire to play in. The very best utility tokens are the ones which put the token holder in the position of supplying tokens to businesses who would be able to effectively make use of the platforms in question.
There doesn’t have to be a market in order for an ICO to score well in this category – but if it intends to create one, the argument has to be extremely compelling.
If there is an existing market, questions here involve whether it is ripe for disruption, whether the technology enables something better, cheaper, or faster (for example) than existing solutions, and whether the market is historically amenable to new ideas.
Most ideas have several implementations. If there are others in the same field, the analyst needs to ensure that the others don’t have obvious advantages over the company in question.
Moreover, this is the place where the analyst should identify any potential weaknesses in the company’s position moving forward. For instance, a fundamental weakness in the STORJ system is that the token is not required for purchasing storage.
With many ICO ideas, the timing may be too late or too early. It’s important for the analyst to consider how much demand there is for the product in question. While the IPO boom funded a lot of great ideas that eventually did come to fruition, a good analyst would recognize when an idea is too early, too late, or just right.
Progress To Date
Some of the least compelling ICO propositions are those that claim their founders will achieve some far-off goal, sometime in the future, just so long as they have your cash with which to do it.
More interesting (usually) is the ICO that seeks to further some progress along the path to success, and which has a clearly-identified roadmap with achievable and reasonable milestones along the way. Founders who are already partially-invested in their products are generally more invested in their futures.
Community Support & Hype
Having a strong community is one of the fundamental building blocks of any strong blockchain project. It is important that the project demonstrates early on that it is able to generate and build a strong and empowered support base.
The ICO marketplace is becoming more crowded and more competitive. While in the past it was enough to merely announce an offering, today’s successful ICO’s work hard to build awareness and excitement around their offering.
Price & Token Distribution
One of the biggest factors weighing any analysis is price. The lower the price the more there is to gain. But too low of a price may result in an under capitalized project. It is therefore important to evaluate price relative to the individual project, its maturity and the market it is going after.
The total supply of tokens should also be justified by the needs of the project. Issuing a billion tokens for no reason will do nobody any good.
Communication is key. The success of a project is strongly tied to the project leaders’ ability to communicate their goals and achievements.
Things don’t always go as planned but addressing issues and keeping the community and investors in the loop can make or break a project.