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Plastc Swiped $9 Million From Backers, Now It Plans To File For Bankruptcy and Shut Down (theverge.com)
Plastc announced today that it is planning to file for bankruptcy and will shut down on April 20, 2017, after raising more than $9 million through preorders and shipping to no backers. "Plastc launched in 2014 with the promise of shipping a single card that could digitally hold 20 credit or debit cards that a user could switch between," reports The Verge. From the report: With that, all backers' money is lost, and no Plastc cards will ship. Plastc announced the news on its website today along with the fact that all its employees have been laid off. Its customer care and social media channels have also been shut down. The company explains that it thought it would close $3.5 million in funding in February this year, but that fell through. Another possible investment deal of $6.75 million fell through, too. What's not clear is how more than $9 million wasn't sufficient to get backers their orders. Backers will likely have questions and want their money back, but with no one to turn to from Plastc, they'll likely be out the cash.
Uh, guys? You check the calendar? You're a little late with this story, don't you think?
“He’s not deformed, he’s just drunk!”
If one were to look at the long term history of the financial industry (going back to before wall street was wall street), you'd find bankers, stock brokers et al were inherently distrusted. Financial fraud is/was easy so they did it... Over and over and over.
This is why there has historically been heavy regulation and oversight.
I did not fund this one, but these guys: https://popslate.com/ took my money and still have that website up (though it does say that their models are "sold out"). Message this March that they would not be refunding or fulfilling orders.
Welcome to America. We don't have chip and pin, we have chip and sign, but actually, fuck signing most of the time.
The chip does NOTHING in the USA except make the whole process take longer. Cloners have been available in the US for these cards for years. And you can still run the, as mag swipe (or even phone-in/ "offline" transactions) at a whole bunch of exempted places that don't have to get their act together anytime soon.
...having too many credit cards in your wallet was not one of them. Can't say I'm surprised it turned out to be a scam. The latest crowdfunded crap I've seen being promoted on Facebook: some shysters trying to convince investors that a Samsung Tablet with VNC installed on it is a novel invention.
These days, crowdfunding seems to be less garage/backyard tinkerers, and more already wealthy con artists using it as an easy source of income. Can't say I blame them - if I had the means to promote and profit from some idiotic "invention", I'd probably do that shit too. Anybody want to invest in my solar powered vinyl player which automatically uploads your music to the cloud? I swear, it's going to be the next big thing!
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DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
The three types of suckers are investors, clients and workers. The most profitable form is to steal from all three and keep the fraud rolling along indefinitely. That is the fundamental model for the financial industry. All the top banks, investment houses, hedge funds, etc skim the wealth generated in the country and put it in their own pockets. That's, along with regressive taxes, underlies the ever increasing wealth disparity between rich and poor.
So what do you think will happen to the scam artists who pulled this off? Will they suffer any economic or reputational damage? No way. They all got out fat and happy, and their business reputation will be enhanced because of their successful raid on a gullible public. I expect they will get better positions with larger companies because of their proven track record of theft.
I expect no change, although it might get worse. I just wish they would stop calling it capitalism.
Why is Snark Required?
Three years ago I did a small crowdfund for a solid state laser cutter; we got 300% funded, delivered our backers' orders in 120 days, and everyone was happy. Small problem: I tell people this now, and nobody takes me seriously because "oh, crowdfunding? must have been a scam of some kind".
I'm ready to go with my next product and since my last one was "too small scale" investors won't talk to me.
As usual, a cool new ecosystem was ruined by parasitoids and saprophytes.
Liberty - Security - Laziness - Pick any two.
The chip does NOTHING in the USA except make the whole process take longer.
I agree with you, but just to clarify.
It's not the chip that makes the process take longer, it's the US regulation that comes with the US chip that makes the process take longer. And the American regulation requires that the chipped card checks the bank balance and do all the handshakes between multiple networks in real time before it allows the transaction to take place, hence the extra delay.
As opposed to Europe, where the European chipped card could work in a place with no phone reception and no network access, the balance would be kept on the card, and the balance would later be reconciled in a central ledger at the end of the day, or at the end of the week (I'm not sure which). But this of course made the card super fast to use.
In other words, let's say you have one thousand dollars in your checking account. In the US, a cloned card could effectively steal that $1,000 from you. But in Europe, let's say you have 1,000 Euros in your bank account, you make 1,000 clones, and you ask 1,000 criminals to all use the card at the same time by sending them the pin via text messages all at once, then it would mean that the bank could potentially lose 1,000,000 Euros by the time it adds up all the transactions of 1,000 Euros when it finally reconciles everything.
Of course, I'm skipping over some technical details, but that's basically the gist of it. Also, I should mention that it's much easier to crack one card in a couple of weeks and clone it 1,000 times than having to crack 1,000 separate cards to clone them once. And also, some chipped cards are allowed to be used without the pin, because not everything on a chipped card is encrypted, and that's ok for some businesses because they'll limit the amount of the transaction when the pin is not used, and also they can take other security measures, like video recording the person, or video recording the car of the person who used it, or something else entirely. And in the end, no system is perfect, and that's ok. A security system just needs to be difficult enough for criminals to crack and low reward enough to make the risk too high for most criminals to want to take.
AFAIK In Europe connection generally IS made to the banks (on occasion this can be slow, or fail and need to be retried, which have both happened to me), but provision is made for disconnected terminals. For your hypothetical attack people would need to find unconnected POS terminals, which are pretty uncommon now. Contactless is another matter, but there is a low transaction limit.
I do think that below a certain threshold amount, making the connection isn't mandatory. That's usually when it goes quickly and it doesn't say "connecting". I've only seen it happen on small amounts. Do note, that this is what I conclude from the behaviour. It would be better if someone who actually knows how this works to chime in.
If anything, I do not think that it's the card that stores the transaction. It would not make any sense at all. Imagine I do a 1000€ purchase, and it would be store-on-card. At that point, I destroy the card or never use it again. My card never gets the chance to "synchronize" with anything. Now, perhaps I misunderstood what you meant with "the balance would be kept on the card", but it definitely doesn't involve storing anything on the card. It's the terminal that must store and forward the transaction. Granted, it doesn't change anything in your scenario, but given European chip 'n pin do connect, I doubt you attack would be feasible (ignoring the fact you need a 1000 unconnected terminals, which is doing to be very hard to find).
Ahhh...the great dumpster continuum. Many a free computer will be found there. -- sowth (748135)
Well, I was at a restaurant at a ski station really high in the mountains, the prices were really expensive, and the handheld POS device didn't have a connection.
And yes, I do realize that many ski resorts in Europe have ok cell phone coverage, I remember seeing the billboards of cell phone companies advertising that fact on top of the mountain itself, but I don't remember seeing those billboards at all the ski resorts I've visited and like I said, at least one restaurant at the top of a telepherique didn't seem to have coverage and yet the European chipped cards still worked.
But then again, it's been a few years since that happened, so maybe the security of chipped cards in Europe has been upgraded since then. I don't know.
So what is the alternative though? Middle men who evaluate prospective investments and allocate your savings accordingly? That is basically how the financial world outside crowdfunding works, and the result has been that central banks have to keep bailing out the bad investments to the point where almost every asset class is detached from any fundamental valuation, and people are paying governments to borrow money from them.
I actually think we are closer to a working system in crowdfunding. Yes there are a huge number of scams and failures, but these quite obviously exist in almost every other investment market. Just look at how things like LIBOR were rigged to understand that an official regulated system is no protection against the same sort of people who might try to take you for a ride on kickstarter. The difference on crowdfunding sites is that it is relatively easy for someone who has done a bit of research into a business to figure out whether the idea is a scam (for example, using basic science). The other thing about these sites is that nobody is crying for the people who lose money on these things. This is how it should be. People waste money all the time. The main problem is when they waste money and then the taxpayer runs to the rescue to bail them out. That crowdfunding still has the notion of buyer-be-ware about it seems quite healthy.
I imagine as these things develop (and move towards micro-equity sites) a whole industry of third-party auditors will spring up who will be able to validate basic information about a business - such as whether the idea has plausibility issues, that the owners are who they say they are, and that the funds are being spent as stated. There are already a lot of these things in place, and I get a sense that many of the people losing money on these scams are actually not that bothered about it, and see it more as throwing a few dollars at a bunch of ideas to see what sticks. This is not necessarily unhealthy if people can handle the losses.
And the American regulation requires that the chipped card checks the bank balance and do all the handshakes between multiple networks in real time before it allows the transaction to take place, hence the extra delay.
That is not typically the reason for the delay. The fact of the matter is that the US region required online processing for EMV because at least 90% of the transactions in the US were already online only. There are some significant attacks against offline EMV that are entirely mitigated by online processing. There are no known attacks on Online EMV with card present. Even without a PIN, you cannot duplicate someone's card or skim it. You can steal someone's card and use it, but you cannot create a cloned copy of the card and use it.
The problem in the US is entirely with poor implementations. The most inexpensive terminals manually check a list of supported brands against the card's brand(s) one at a time. The brands have IDs that can be incredibly specific. A lot of the processors I've worked with want to manually add each and every ID to their configuration basically saying "I support North American MasterCard. I support Australian MasterCard. I support European MasterCard..." for basically every region in the world when they could just say "I support MasterCards of all types." So the card terminal sits there for a solid 10- 20 seconds just going through its list asking the card "Are you this brand?" Literally. Regulations in the US require you to support "US Common Debit" if you're going to allow debit transactions. There is literally one additional ID that is required to be supported in the US versus other regions. Furthermore, you'll find that transactions go online and receive approval in Europe somewhere on the order of 70+% percent of the time and are still faster than US transactions. I'm working on a project right now for a company halfway across the world from me and, when I have control of the terminal flow, I can run through the entire process from the US, 8000 miles, back to the US for issuer authorization, then back that 8000 miles to the processor and back to me in about 300-400ms. With a processor who lives in the same city, I can complete a transaction in 100-200ms on a slow day.
When I say that, I'm obviously excluding transactions that require prompts, but one where I have the terminal flow set to run the transaction from end to end the instant the card is inserted into the terminal with no further human interaction required.
As opposed to Europe, where the European chipped card could work in a place with no phone reception and no network access, the balance would be kept on the card, and the balance would later be reconciled in a central ledger at the end of the day, or at the end of the week (I'm not sure which). But this of course made the card super fast to use.
They have not done this in Europe or anywhere else in a long time. I think the last card issued that behaved in this way was around 2007. Some of them haven't expired in their countries of origin and you still have to support this capability in some regions, but it's being phased out. You cannot trust a balance from an offline transaction. The terminals all have a transaction ceiling which, when hit, a transaction is forced to be processed online. In the US that limit, from a liability standpoint, is $0. For most European merchants, they use somewhere on the order of 20-40 pounds/euros/whatever. Basically a high enough limit that you can recharge your metro card. That limit is also based on the type of merchant as well. The majority of card fraud occurs at gas stations and the industry has completely different rules for unattended gas pumps.
And also, some chipped cards are allowed to be used without the pin, because not everything on a chipped card is encrypted, and that's ok for some businesses because they'll limit the amount of the transaction when the pin is not used