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Introduction

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As many of you know I like to invest in interesting ICOs. Recently I have been interested in distributed computing projects like Golem and Elastic.

A lot of people have been recommending that I invest in SONM which starts its ICO today so I went to check it out and find out more.

When I went to the Bitcointalk thread the first thing that struck me was that they seem to be making very grand claims - maybe it is just me but I generally think it is better to under-promise and over-deliver.

This was an immediate red flag as it just looks to be setting them up for problems. A competent team would not be doing this.

Further I am not familiar with the core team here - not unusual in cryptocurrency but I generally tend to be more careful (or at least try to be these days).

I noted that Max Kordek (LISK) is an adviser but it is not clear what this role entails so I'm not sure how much legitimacy this adds. The ETH core developers seem to be "advising" on any and every ICO and I doubt even they could tell you which ones they are a part of. If it all goes wrong I am not sure how Max would be able to help.

More positively the fact that they were using Sebastian Ju (a long trusted community member for Escrow) was a plus though - then I found some troubling comments that were posted by Sebastian earlier today:

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No Escrow and Nobody Bothered to Tell Sebastian

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Here is the text of what Sebastian Posted on Bitcointalk (link):

Hello everyone, SebastianJu here, official escrow of SONM. Normally I would have written something already days ago about how things will move and would have given more details. Unfortunately I lost contact with everyone from SONM some time ago. I requested to speak about and check the new contracts some time already and was told it will happen before the ICO.

Well, I often tried to get in contact the last days also, sent pm's on bitcointalk as well as email and dm's on slack to rebel.salesman, who normally is my contact, alexey and sergey. I was ignored except finally sergey answered me with the actual link to the ico contract on github. I checked and found it a bit strange to read nothing about anything pointing to the use of an escrow.

So I used a channel with sergey and rebel.salesman on slack and wanted things to clear. Time already was pretty far by that point because no one bothered to speak with me:

@channel it looks to me like there is no escrow involved anymore in the ico contract. I would appreciate to hear something else but the code leaves a different impression. Also you did not communicate with me at all about the ico even though I was told we would speak upfront about it. I tried to get in contact all the last days. Time is forward way too far now so it does not sound believable to happen. Also having too much work to do is not believable since the seamless work of the escrow part is fundamental for the safety of the ICO into both directions.

I do not know what happened. Maybe you would have wished to renegotiate the escrow fee. You did not try that at all. Maybe you wanted more safety... in that case I would have been able to bring in one or two other trustworthy escrows and create a 3 of 5 multisig. but no communication happened.

Guys, I will go to bed now. Please answer me in a proper way so that it looks like you take this serious. I hope this can be cleared earlier than 6 hours before the ICO starts.

I really hope you can tell me I interpreted everything wrongly.

Well, 2 hours earlier rebel.salesman answered me with this:

"Sebastian, hi, sorry for delayed response - lots of work to do at the moment. We are going to use ICO smart contract with multisignature as the escrow. Multisignature will be held by Sergey Ponomarev, Alexey Antonov, and SONM advisers.

I'm really sorry we didn't contact you earlier to discuss it. Lots of work is not an excuse, we should tell you about it before.

Anyway, it's pleasure to have business with you. Thank you for your help and your time during the preICO!"

So the ICO is NOT escrowed anymore. The invested funds will be held by the SONM team totally. I can not provide any safety from now on and I need to take my name from the safety sign of the SONM ICO. Just to make clear that I will have no access nor control about invested funds.

Not sure what to say about that behavior. I believe nobody would have contacted me without me pressuring that way. People would have invested believing I hold the funds in escrow. Which is not the case.

Nobody contacted me about negotiating something upfront, telling me about a change or tried changing something in the deal for the ICO.

So that's what I unfortunately only found out by putting pressure on the topic.

So again... this ICO is not escrowed anymore. Funds will be hold and controlled by SONM totally from the start.

So in summary it seems that rather than an escrow being used there will be a multi-signature contract instead BUT this will be controlled entirely by the team.

Nobody bothered to discus this with Sebastian or the community before the change of plans.

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My Thoughts

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This thing just seems full of red flags to me:

1. The hyperbolic claims sound unprofessional and suggest a lack of experience - that is the kind interpretation.

2. The treatment of Sebastian Ju is outrageous and smacks of incompetence and just downright lack of courtesy.

3. The sudden abandonment of Escrow makes no sense - a multi-signature wallet which is controlled entirely by the team requires you to entirely trust the team in the first place - so I don't see the point.

4. If this were a professional team they would have postponed the ICO and discussed these issues with the community before proceeding.

5. The failure to disclose the change in escrow arrangements to the community shows either deliberate dishonesty or(almost as bad) extreme negligence.

6. The behaviour of the team in this case does not make me confident enough to make an investment (- to put it lightly).

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Conclusion

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I am not saying that SONM is a scam but it seems the team is acting in a way that will undoubtably lead to the accusation. That just makes it a bad investment.

It is easy to get caught up in FOMO - I have often done that in the past but I am working on being more discerning when it comes to investing.

Now it is entirely possible that the team will end up producing a great product but right now it looks like it has the makings of a disaster and there are so many other ETH ICOs that we are spoilt for choice.

If the SONM team get their act together in the future I might buy some on exchanges but right now I will keep my ETH for other projects.

Right now I WILL NOT BE INVESTING.

I would love to hear what other people think.

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Thank you for reading

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