In 2018, the project EOS Raising capital through ICO, which lasted for nearly 10 months, raised a record of 4.2 billion USD, becoming the largest ICO in history. Combined with the proof-of-stake consensus mechanism (DPoS) is authorized with throughput thousands of times greater than Ethereum, EOS advertise yourself as one Ethereum Killer.
However, the project team was “saying one thing and doing another” after sitting on a mountain of money. Check out the development dApp stagnation (blockchain ma) of EOS and the long slide on the CoinMarketCap rankings, showing that the project has failed miserably. Currently, their team has also said a lot less.
In December 2020, EOS founder and chief technology officer Dan Larimer resigned and left with a mountain of money, further adding to the uncertain future of the project.
New research from legal financial analysis firm Integra FEC has cast a new doubt on the viability of the project.
What happened to EOS?
There are many reasons for EOS to drop in price. First, there have been claims that EOS's structure resembles a distributed database rather than a cryptographic protocol. Meaning the network is not decentralized as claimed.
“The EOS network is not necessarily a cryptocurrency network based on blockchain, which is a homogeneous distributed database network that allows different user accounts to communicate and interact through a distributed network database”.
At the end of 2019, EOS experienced a congestion problem that resulted in slow transaction times and high fees. Thus, further raising doubts about the so-called thousand times higher throughput Ethereum, while the mass dApp on it is only a fraction of that of Ethereum.
In short, Block.one seems to be deliberately making a product to legitimize the huge amount of money raised, rather than putting that money to the full development of the EOS network. In just a few years, when no one talked about EOS, it fell into oblivion, and the team behind it successfully exited the scam without being known as a scam.
This is reflected in its price performance, showing the team's lack of interest in the project. April 2018 saw EOS hit an all-time high of 22.71 usd. Although most of the top coins have come ashore, EOS is still diving at 6 usd as it is now.
What is EOS accused of by the Integra FEC?
Research conducted by Integra FEC, led by John Griffin from the University of Texas, points to suspicious transactions in the EOS ICO. It is alleged that these transactions may be laundered, between affiliated companies designed to pump prices and entice investors to jump in.
“Transactions, between potentially connected affiliates, boosted EOS price and caused investors to fomo buy into".
Griffin expanded on the issue by saying it was a manipulation of the price of EOS. The results of the suspicious transactions resulted in the token's market value being inflated. In turn, this entices more people to join.
There were 21 accounts identified as being involved in the activity described by Griffin. He estimates the "recycling fund" at $815 million. However, the actual total amount involved could be significantly higher since other methods of price manipulation may have been used.
The source: news.coincu.com