The promise of the founder, Sam Karagiozis, was to build a network of 1,200 Bitcoin ATMs in Australia. Later, the claims became more modest, with the number down to just 60 machines. Despite the novelty effect, Bitcoin ATMs remain a small niche.
Sam Karagiozis does not fit the profile of crypto startup creators - usually computer scientists with a view on improving the world of technologies. In the 60 Minutes investigation, Karagiozis mostly boasted of the newly acquired wealth, seeing crypto as a path to quick riches.
My face is plastered on every channel across the nation. If anyone thinks this will fail and I will ruin the reputation I have built over the past 11 years, they should think again!#teamAUSCOIN@auscoin_io
Indeed, the biggest risk that Auscoin poses is the way it advertises the claims. Holding an ICO with the intention of raising $80 million is rare in 2018, when startup projects now aim for far more modest sums, and a gradual plan for development. Also, ICOs usually target mostly the crypto community, and rarely venture out to target older investors or demographics not organically interested in crypto coins.
Regular investors, coming from the world of traditional assets, may not be skeptical enough and fall for the outlandish return promises of new coins.
The approach of Auscoin is not unlike that of Optioment, a European scheme that held large-scale pep talk events, and virtually brainwashed potential investors with a very cultish approach. It is possible that the newfound wealth of Karagiozis could make him look like a legitimate investment guru, able to swindle funds from uncritical backers.
The crypto community, however, is taking the claims with a grain of salt:
BitCoin guy on AusCoin: "I'm not saying it's a scam but... Yeah, no, it's a scam" #60minutes
But the positive thing is, the ambitious ICO aims of Auscoin may never come to pass. At this point, the Auscoin ICO has gathered up only a small fraction of the sum. The losses may still hurt individual investors, but there have been steeper losses in the crypto space recently. The trouble is, this time, the losses are not just on paper, but a real investment of value in return for very risky tokens.
The news and shameless promotion of Auscoin come at an unfortunate moment, just after the BitConnect and DavorCoin schemes went underwater, and new pyramids even failed to launch.