The owner of the GetFreeDash proposal, Cryptoridez (formerly DashMaximalist), recently announced that he had “uncovered major fraud activity” that has resulted in “about $10,000 in fraudulent claims.” The GetFreeDash proposal has received two of its three payments of 150 DASH, for a total of 300 DASH, with the goal of giving away Dash to Venezuelans who sign up on the proposal’s website.

Cryptoridez has claimed that there have been 140,000 signups to receive free Dash in the two months the proposal has been active. The proposal text notes that “Dash is going viral in Venezuela” and requests continued funding to meet its goals. However, in light of the recently reported exploit, some in the Dash community are wondering if the project should continue. Macrochip is leading the effort to have the project defunded.

The fraud

Cryptoridez asserts that users were able to game the system and request free Dash over and over again. This is due to a flaw in the project’s verification system. When a new user signs up, he will receive an automated phone call from a random number. Upon receiving the call, the user must log on to GetFreeDash’s website and enter the last four digits of the phone number that called him.

Apparently some realized they could game the system by “registering 1000s of fake numbers” and then randomly entering four digit numbers into the verification webpage. Some of these would end up being correct, and the user would receive free Dash multiple times. Cryptoridez notes that approximately “40,000 – 60,000” such fraudulent accounts were created, resulting in a loss of about $60,000 in funds, although $50,000 was recovered by “freezing accounts and reversing withdrawal requests.”

Mea culpa, kind of

Cryptoridez apologized for the flawed verification system – kind of. He wrote:

“I sincerely apologize for not putting this check and making sure we stop this fraudulent behavior early on, however, i was tied up with various issues continuously.”

In the forum thread Macrochip started to lobby for defunding the proposal, Cryptoridez wasn’t quite as apologetic, instead threatening to take his ball and go home:

“I see a lot of votes converted to NO already, which is an absolute knee-jerk reaction without even doing some basic research…I am already very frustrated with almost the constant hate that I have put with up with absolutely nothing in return, if the project gets defunded, I will get out of DASH once forever … thanks.”

In defense of experimentation

On the Dash forums, TanteStefana posted her opinion that the project should continue, writing:

“I’d kind of like to see an experiment like this take it’s course. The way I see it, everything with Dash is half enterprise, half experiment. I’d be surprised if any of the MNOs who voted yes to this saw it as anything more than an experiment and probably wrote it off as a likely failure but saw potential if it could be made to work.”

She does note that in a tight funding environment, defunding GetFreeDash might be worthwhile, but that it shouldn’t be done for punitive reasons.

Dash Force News put this question to both Macrochip and Cryptoridez. Though Cryptoridez did not respond in time for publication, Macrochip wrote back. He explained his belief that the treasury system was created “as a way to improve the value and usefulness of the network” and was not intended “to fund amateurs experimenting with free money on our dime.”