The Snowdog Snow Job: What Happened, Who’s to Blame, and What Can We Do?

In the US, Thanksgiving is a time?for families?to come together?and?give thanks for the many blessings in their lives.?Around dinner time on?Thanksgiving on?the East Coast,?what?appears to be?one of the nastier?rug?pulls in the history of cryptocurrency left plenty of investors?less thankful and much?lighter in their wallets.??

The?Snowdog?coin?(SDOG) was?based on an eight-day experiment with a buyback promised at the end.?However, the buyback never happened.?Instead,?all of?the coin’s?liquidity?was?moved to another exchange. Then, two?new?Coinbase?wallets made?exchanges before the exchange webpage was live.?The coin lost over 90% of its value in minutes.??

Where the story turns fraudulent is that the only way the exchange could have taken place is with a “challenge key,” which only Snowdog insiders knew ahead of time. The situation was discussed on the CryptoWendyO show here:?

“This certainly looks like an inside job where someone made millions of dollars on two transactions,” says MacguyverTech’s Steven McKeon (Mac). “They didn’t follow up on their promises, and unfortunately, a lot of people got wrecked. They liquidated within three or four seconds?before?it was launched. Someone knew something before everyone else did, and went straight to the target to liquidate everything in one shot.”?

Snowdog ?published a postmortem?here, ?but most simply aren’t buying it. “The postmortem didn’t?address?any of the concerns,” McKeon continued. “It was really wishy washy, and tells me they?don’t?care. They’re?trying?to cover their?butts?any way they can. That project has a super-high risk;?I’d?avoid them at all costs.”?

So how do crypto investors avoid this in the future? The crypto finance world has repeatedly been referred to as the Wild West of investing, and as such, fortunes can be made and lost quickly in a near-lawless environment. So how can we avoid the next Snowdog without having to hunt down the white hats to make things right? There are a couple things that seem like common sense, but are often missed in the rush caused by Fear of Missing Out (FOMO).?

Do your research. If?a crypto investment?looks too good to be true, look harder?and make sure it?isn’t?too good to be true.?Is the Whitepaper sound? Is it well-written??Is the project fully transparent? Is the project team?doxed? If the answers to any of these questions is “no,” this should be a red flag.?

Only invest what you can afford to lose.?This seems like the most common-sense thing of all, but the excitement of a hot cryptocurrency market can send reason out the window.?

Trust your instincts.?This will fall back to the “too good to be true” point.?To borrow from Malcolm Gladwell, we have an “adaptive unconscious.” We?know?in our gut that something isn’t quite right, even with a newer field like cryptocurrency. If?it looks shady or feels like a scam,?get out.?

Be wary of new projects. Short-lived projects are far more susceptible to rug-pulls. Not?every?short-term project?that fails?is?fraudulent, but that doesn’t mean it’ll be successful. Like small businesses, there are plenty of?internal and external factors that can make a project fail.?Let it prove itself before you sink a lot of money into it.??

Sometimes risk comes with reward, but sometimes it comes with tremendous loss. Some people lost?an enormous amount of money on Thanksgiving. So as always, do your research, play nice, and be careful out there.?