This is the first of a series of investigative article about Crypto-Mining schemes in general and Wachsende Werte as a case in point in particular. Crypto-Mining has become very popular as a vehicle for online investment schemes recently. Actually, it’s a nice story to tell – print your own money.
Firstly, I have to apologize for the long time it took us to come up with a report on the Austrian Crypto-Mining scheme Wachsende Werte (www.wachsendewerte.com and www.growing-value.com). Secondly, I have to say thank you to all people contributing with information to our investigations. And, last but not least, we say thank you to the promoters of the scheme that disclosed some parts of their construction to us.
That said, it’s clear that Wachsende Werte doesn’t seem to be a scam or a fraudulent investment scheme. Good news, right?
Nevertheless, we are worried about the overall structure of the scheme with some “for-profit” organizations and a “not-for-profit” organization. Both parts of this scheme are governed by the very same people, i.e. the directors of the “for-profit” organization Wachsende Werte GmbH & Co KG are also acting as board members of the “not-for-profit” organization “Scryptmining“. Both legal entities are registered in Austria.
Because of the personal configuration, we have to treat these Wachsende Werte elements as a jointly acting group, i.e. they are related parties in the legal and accounting meaning of the term. In principle, the business model works as follows:
- The “for-profit” mining-hardware business sells mining-hardware and mining-hardware solutions to investors, At this stage profits (margins) are realized by Wachsende Werte Gmbh & Co KG which we can assume to be between 30% and 50%;
- investors “lease” their mining-hardware to the “not-for-profit” Scryptmining entity on a shared risk-basis;
- only 25% of the mining returns (cryptocurrencies) are paid to investors, another 40% are kept as a reserve for a “life-time” mining scheme (will be explained in more detail in the next telegram);
The basic idea of the configuration seems to be to generate “risk-free” profits from mining-hardware selling and share the risks of crypto-mining with its investors (lease partners) in the Scryptmining entity. While we are not purporting that this is in any way an illegitimate structure, we are convinced that Wachsende Werte should disclose the structure and profit distribution in all details in its publicly distributed information.
In our next telegram, we will provide you with more details on Wachsende Werte’s revenue, profit and risk sharing configuration. We, too, will provide you more information on the group’s mining facilities as they just installed a new mining center in Austria.