Yassin Hankir of Savedroid on Exit Scams And ICO Sustainability
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Yassin Hankir does not pause when he talks. The founder of Savedroid, a German payments startup, doesn’t punctuate his sentences with umms, or aahs: he speaks in declaratives, with clarity and purpose. Only once during our 40-minute discussion does he hesitate significantly, perhaps sensing that in this moment he needs to find the right word. A brief silence, almost as though he’s conferring, and then he returns with “prosecution“.
Dr. Hankir made global headlines in April when he disappeared from public view, faking an ‘exit scam’ – a phenomenon in the virtually-unregulated cryptocurrency world, in which the founders of an Initial Coin Offering (ICO) disappear with the money they raised, leaving investors with no recourse – and no cash.
Hankir, whose company raised almost $50M, made sure his intentions were clear: the Savedroid website was replaced with a still image nabbed from South Park, the Telegram account was abandoned, the offices were gutted of equipment – and to make sure the message got through, he tweeted a photo of his supposed departure from an airport – and subsequent enjoyment of a beer on the beach. The message that accompanied the tweet? “Thanks guys. Over and out.”
— Yassin Hankir #savedroidico (@YassinHankir) April 18, 2018
Frustration, Anger, Action, Apology
“We’re sorry” says Hankir, several times during our talk. “We need to apologize for the action we took; since it was very spontaneous we didn’t think through all the consequences and we gave people a very hard time, our ICO investors… and we are sorry.”
Hankir did not fit the bill for an exit scam. A public figure who speaks at conferences, and who built a strong community around his ICO, he has both an academic and business background that suggests strong credibility. The product itself – Savedroid’s payment system for converting fiat to cryptocurrency, designed for simplicity and mass adoption – seemed to be adhering to the roadmap, and has been under development for three years.
Hankir’s account of the run-up to his stunt does not seem practiced or forced. We spend some time discussing the Savedroid app, which has some novel features for saving – some suggested by the community. The app will transfer micropayments of fiat to crypto based on an IFTTT-type trigger system – for instance, it might use geofencing to send a deutsche mark or two when you get to the gym; when you achieve your step goal (monitored by your phone) it might send another one; and when Donald Trump tweets about North Korea, it might send fifty DM to your nuclear bunker fund.
But his voice changes when we move on to the subject of his company’s ICO. He speaks faster, and is clearly agitated.
“For the whole time of our ICO, four months, on a daily basis, 24/7, we were exposed to scams,” he explains. “Scammers duplicating our website… cloning it… doing Google ads to drive traffic to them and then changing the [ETH] addresses so that people would buy “tokens”, but of course they were really sending their money to some scammer, and then it’s all gone.”
“On Telegram, people doing fake profiles as admins… some strange guys who wanted to deposit physical cash which of course is for money laundering purposes… scamming in every direction, trying to rip off your community… and you realize it’s like fighting the wind. We warned people in our newsletters, we contacted Google to remove the ads, but you cannot prevent it 100%. You want to protect your community but you cannot, and this was a really frustrating experience.”
Frustration boiled over into anger, Hankir admits, and this anger – plus a healthy dose of self-interest – drove the decision to do something about the scamming.
“So we could say, lucky us, why deal with this any more… but we decided that the ICO market is not sustainable, the scams create a significant risk to the market. If there is no trust, the whole market will break down. So this is in our own business interest.”
As Hankir describes it, this is what led to the spontaneous decision to fake an exit scam.
How The ‘Exit Scam’ Looked From Within
“We went to a city close to Frankfurt, Wiesbaden, about 50 kilometers,” says Hankir. “We went to the most prominent startup location and rented a room, and the whole team was there, working on this. It was very spontaneous, there was no planning, we just got in the car and went there and then we took down the website.” Hankir sent me a link to the co-working location.
“We had no idea that the story would be picked up – in Germany of course, we expected it would be a big topic, but then it was the ‘States, and Bloomberg and TechCrunch, and that was not expected.”
“The whole action took place over 24 hours, and we used this day to work on the communication, to make clear what the point was, and what a solution could look like.”
I asked Hankir about the two photographs in the tweet, and how he reacted to the fact that Crypto Briefing journalist Adam Selene had located the resort pictured in the second photo.
“At the end, we did not manage to get our message across.This was very badly done, and we understood that fairly fast, and the way the action was carried out was not appropriate. Now, a few weeks past, people are able to have a fact-based discussion about the future and what could be done differently in the market.”
The reaction to Hankir’s spontaneous protest over ICO scammers was profound and immediate. When Crypto Briefing published the location of the resort where Hankir had stayed (and was presumed by many to be staying at the time of the stunt) volunteers in Egypt from our Telegram group began contacting local authorities; random threats of violence against Hankir were immediately banned, but the more specific ones were kept – just in case:
“I lost around $70k”, said one Telegram commentator. “With $70k I can hire 10 Hitmans [sic.]”
Another suggested that “I am -15k because of this ugly turk” and “I can come from Bulgaria and kill this motherfucker.”
Hankir himself was visited by the Frankfurt police:
“One person filed a complaint on that night. Then the prosecution has to initiate an investigation. And the police check by your office and see if there is any real cause – and we got visited by the police, and they found yes we were here, we were working, and so it was just one office visit and the outcome was very clear, so the thing has been closed down.”
As to the impact on Savedroid’s reputation and success – that may never be quantifiable. The SVD token is not currently listed on exchanges, although the website claims it will be soon. In the Google App store, Savedroid has over 100,000 installs – but the dominant comments concern the exit scam stunt, and it’s hard to imagine that this conveys the trust that Hankir so covets.
So What Was The Point?
“We are not the messiahs”, explains Yassin Hankir. He wants the world to know that he’s sorry, deeply sorry… but his apologies are immediately followed by justifications.
And that’s where there’s a disconnect in our interview. Sorry, but…
Hankir is not sorry for trying to create awareness that the ICO world is full of scammers and driven by short-term financial gain. He’s not sorry, in my opinion, that he took this action at all.
He’s sorry that we didn’t hear or understand.
It’s the one aspect of the interview that continues to disturb me. He has a noble cause, but I come away from this discussion with a sense that he believes, deep down, that the end justifies the means. Which has a somewhat messianic ring to it, after all.
To be fair, the message that he has now made clear is one that the cryptocurrency industry needs to hear. An implosion of value is, Hankir believes, virtually guaranteed if market participants can’t begin to examine their motives and methods, and adjust to fit a more normalized market model.
“We are a small startup, we cannot change the market,” says Hankir. But he is trying to lead by example – holding live Ask-Me-Anything (AMA) sessions for two hours every few weeks, inviting his constituents and stakeholders to the office, enabling community voting on certain key decisions. And of course, building the due diligence checklist he announced in his “Not An Exit Scam” video.
The responsibility for safer ICO participation, he believes, lies with the potential investors as well as the founders of the team. “People expect 5x or 10x and this is unrealistic, and they need to invest 10 minutes into looking at a whitepaper, and doing some diligence to come to a better investment decision.”
Of course these sentiments are admirable and, by any reasonable standard, correct. Words and actions are seldom perfectly synchronized, however… this ‘token price simulation’ is directly from Savedroid’s ICO website.
Regarding the ICO model, Hankir is concerned the external regulation will kill the crowdfunding model unless the industry begins to take responsibility for its own sustainability. He believes that only the creation of a self-policing entity, some kind of centralized certification organization for ICOs, will curb the excesses of the market.
“It’s binary,” he says, “It’s not like 3.4 or 4.2 out of 5… it’s one or zero. So either you get it [the certification] or you don’t get it. Once you get this, if the good quality ICOs are getting it, why is the scam ICO not getting it? And that will make investors ask questions.”
Was It Worth It?
In the final analysis, it’s clear that Hankir has reflected on these events, and that he is both remorseful about the anxiety he caused his investors, and distressed by the fact that the message he sought to spread was not the focus of the coverage.
Between the lines, however, there are interesting choices of language in Hankir’s interview. Every description of the fake exit scam is as an ‘action’. Never a stunt, never a public relations exercise, always an ‘action’. Someone, it might be inferred, has taken some serious legal advice.
I can’t blame him. The prank was childish, and harmful. As Adam Selene commented to Business Insider’s Zoe Bernard, “This is not monopoly money, [Savedroid’s investors] are real people. People were panicking on Telegram. This is not funny.”
But the message – which Hankir continues to push – is on-point and worth hearing.
“The action itself, I fully admit I have to apologize, it has not been the right way to communicate – but we stick to our message that the market is way too scammy, and this needs to change or it will be unsustainable.”
It’s hard to disagree. And hey, here we are, spreading that message. Maybe it DID work, albeit with a delayed reaction?
Meanwhile, Hankir wants to get on with building his company and his product. Yassin Hankir isn’t just the guy who pulled a silly fake exit scam; he’s someone who’s advocating for a business model that many of us have found to be exciting, inclusive, and rewarding.
Maybe we should give him a mulligan… and accept his apology.
“I just want to duck below the table and say, okay, please don’t be mad at us.”
And although these parting words may represent some wishful thinking, I’m personally ready to move on.