Crypto company Sparkster delisted from multiple exchanges as they face Fraud allegations

Bithumb Global delists Sparkster.

SPARKSTER DELISTINGSIDEX – 6pm UTC, roughly 1 hour from now — https://twitter.com/idexio/status/1140979946212483073?s=19

Those announcements were made ~3 hours ago.
Sparkster chose to not communicate news of importance to its token holders.

  1. @SparksterNews – No update.
  2. @SparksterICO – Read-only mode.
  3. Twitter Sparkster_Me – No update.
  4. Mailing list – No update.

Sparkster token holders are deprived o fbasic communication.

Those who were misled to follow Sparkster’s news source as their only source may not be able to react timely.

SPARKSTER’S Smart contract raised serious concerns when the technical team noticed a fatal flaw

The transfer revoking ability in the contract was placed there to allow us to rectify any transfer mistakes we may have made during distribution.

1. Or you can do it like other project or any payment, any financial/accounting/bookkeeping department for that matter; Don’t make mistake

2. transferRecovery was also proposed to be used for CEO’s OTC pet project.

3. transferRecovery was still there AFTER distributed, umlocked, traded. There could be a flag to disable it permanently.

We used this function to help numerous token holders who had their wallets compromised, by moving their tokens to a new wallet – again to protect the community at large.

This is illogical, how can a revocation be a feature, in a world of blockchain and immuntability.

Eve hacks Alice 100,000 SPRK → Eve liquidates it to 1 ETH by selling it to Bob → Eve sends 1 ETH to wallet.

If transferRecovery recovers it from Bob, who pay his 1 ETH?

The minting ability was in place to allow us to facilitate a token split, for which a function exists in the current contract.

According on the SC, tokenSplit is close to useless after token distribution or traded, since a function will be gas ineffective or run halted for exceeding the gas limit.

We wanted to have the ability to facilitate a token split in the event that demand for our token would make running software in our ecosystem prohibitively expensive, or erode the staking deterrence.

1. Why’d running software in ecosystem, be more expensive? SPRK has 18 decimal spaces for that. Why’d running software in ecosystem be pegged to SPRK rather than real world supply and demand?

2. tokenSplit does not change the holdings of token holders. How does appreciation of SPRK erode the staking deterrence? Staking deterrence eroded, or pseudo centralization, will be reflected in the value and cause the value to adjust organically without SPRK invention to artificially inflate/deflate anything.

3. Mainnet does not have staking, does not even run on any other node other than sparkster node, does not even have block mining for rewards.

The solution, at that time, seemed to be to provide a token splitting and reverse token splitting function and mitigate this risk, this necessitated a minting function.

That is false. According to the SC, tokenSplit and reverseTokenSplit do not have dependency on mintToken.

tokenSplit has its own codes to modify supply.

mintToken is an independent function with the sole purpose of minting token.

At this point, sparkster CEO only defense can only be ignorance as he doesn’t check nor delegate someone to supervise the SC.

Conclusion: This is textbook example of underhanded backdoor – code that is malicious, but passes a rigorous inspection, and looks like an honest mistake even if discovered.

References
Sparkster original post: https://t.me/SparksterNews/309

SmartDEC article on overpowered sc: https://blog.smartdec.net/overpowered-smart-contract-owner-decentralized-totalitarianism-15e32fb2af4c

SPRK smart contract: https://etherscan.io/address/0x971d048e737619884f2df75e31c7eb6412392328#contracts