On 13 May, Asian News International carried a report that deemed Aquaoin, a recently founded company, the “block chain solution for India’s water woes.” Subharansh Rai, Aquaoin’s media advisor, was cited as claiming that the company consists of “a group of entrepreneurs in India who have come up with a block-chain based technology ‘Water2All’ (W2A) that can recycle waste water and make it safe for human consumption.” But in reality, Rai told me, the blockchain technology would only be used to verify the Aquaoin-brand authenticity of the bottles. The proposed machine for purifying water has little, if anything, to do with blockchain, and the company refused to provide any precise details on how it would manufacture these machines. Based on this supposed solution to India’s water crisis, Aquaoin has been promoting an upcoming “crowd sale” of its cryptocurrency from 9 to 15 June—but the fact that several team members of the company have past links to questionable cryptocurrency schemes raises concerns about this crowd-funding campaign.
Innovation through blockchain—the underlying technical structure of cryptocurrencies, including the first one ever, bitcoin—has been especially in vogue lately, with the technology being applied to solve problems in healthcare, insurance and finance, among other sectors. Blockchain allows users to store data in a secure digital record that is shared across a network of computers and continuously aggregated, which typically makes it impossible for any part of that data to be altered. But the blockchain-oriented aspect of Aquaoin’s plans has nothing to do with its promised silver bullet—the supposed “state-of-the-art” water-recycling machines.
Aquaoin seems to use vagueness and secrecy to its advantage. The company’s proposals are available on its website in a whitepaper—a document that functions as a pitch to potential investors—which explains its plans on “generating revenue to commission a Research and Development (R&D) infrastructure” to create the water-recycling machine. But there is no evidence revealed in the whitepaper, on Aquaoin’s website, or during my conversations with three of its members, to indicate that the company has conducted any substantial work on its project. Moreover, at least two of Aquaoin’s team members have links to fraudulent or dubious investment schemes, including those run by the bitcoin entrepreneur Amit Bhardwaj. It goes to show that despite recent steps that India has taken to punish and curb fraud with cryptocurrencies—such as Bhardwaj’s arrest, and the Reserve Bank of India’s imposition of restrictive regulations to banking transactions involving cryptocurrencies—crypto-related scams still pose risks to Indian investors.
Aquaoin is in the process of launching an initial coin offering, or ICO: a crowd-funding method where participants make investments using cryptocurrencies. Ethereum is a cryptocurrency as well as a computing platform on which anyone can release a cryptocurrency token—a unit of value that companies issue to investors in ICOs, similar to the first sale of shares of a company during its initial public offer. To purchase AQN—the token that Aquaoin is issuing, which is released on the ethereum platform—investors must pay in either bitcoin or ethereum. According to a roadmap on the company’s website, the upcoming crowd sale will be the third stage of its ICO, following the website launch on 22 April, and a “presale” conducted in the first week of May. It proposes to begin the distribution of its “supplies to India and countries of Southeast Asia” in September–December 2019.
John David, the chief operating officer of Aquaoin, who is based in Malaysia, told me he was the founder and chief executive officer of two consultancy companies, Asia Blockchain Solutions and Cryptotech and Consultancy Limited, in which he helps educate and advise people about cryptocurrency. “The public may not be able to understand what to look for in an ICO,” he said. “This is where our services come in.” When I asked him how to identify scams, he mentioned plagiarism in whitepapers as an important indicator: “When we do a study, we even look at whether they copy the whitepaper from any other whitepaper.”