A look at the rise and fall of Skycoin, a cryptocurrency that had a ~$5B total value in 2018, ran a team of social media “shills”, and was plagued by scandals
The cryptocurrency promised to change the world and make its users rich in the process. Then it began to fall apart. Tweets: @ofnumbers , @michaelluo , and @hkanji Tweets: Tim Swanson / @ofnumbers : fantastic article covering the fraud-filled coin world. a similar level of craziness likely occurs with many coins, we just don't have enough gumshoes like @morgenpeck to critically investigate all of the outrageous claims. below are a few choice passages that stood out. https://twitter.com/... Michael Luo / @michaelluo : Wild crypto tale. “I just became shell-shocked. What the fuck have I gotten myself into?” https://www.newyorker.com/... Hussein Kanji / @hkanji : The cryptocurrency promised to change the world and make its users rich in the process. Then it began to fall apart. https://www.newyorker.com/...
Context & Ripple Effects
The New Yorker's investigation closes a loop that earlier coverage only hinted at: as far back as 2017, Tim Swanson was documenting how [[a:922537|shady exchange and ICO practices and conflicts of interest in journalism went largely ignored by the media]]. Skycoin — a coin that touched roughly $5B in total value in 2018 while running a team of paid social media shills — is the case study that proves the pattern was structural, not anecdotal.
The piece also sits squarely in the promotion machinery lineage: [[a:925867|Bitconnect reached $2.6B+ through multi-level marketing and spamming Google with its own 'news' posts]] in early 2018, the same year Skycoin peaked, and by mid-2021 the influencer playbook had scaled from Kim Kardashian to FaZe Clan and Elon Musk promoting altcoins to fans. Swanson's own takeaway — that a similar level of craziness likely occurs with many coins, with too few investigators like Morgen Peck to check them — frames why this single post-mortem matters beyond one coin.
First-order effects
- Skycoin holders who bought near the 2018 peak are left with the direct loss, while the exposed shill operation retroactively poisons every piece of community 'hype' that supported the coin's valuation.
- Tim Swanson, Michael Luo, and Hussein Kanji amplifying the investigation gives the story reach beyond crypto circles, putting pressure on other projects with similar paid-promotion structures to explain themselves.
Second-order effects
- Every influencer-backed altcoin now faces the Skycoin comparison, forcing promoters like the Kardashian/FaZe/Musk cohort covered in the influencer piece to defend paid endorsements that previously passed as marketing.
- The documented shill playbook strengthens the hand of voices like the NYT op-ed calling for regulators to crack down, converting an abstract legitimacy argument into a concrete fraud narrative.
Third-order effects
- If Swanson is right that Skycoin-style promotion is widespread but under-investigated, the industry's real bottleneck is investigative capacity, not bad actors — pointing toward either a professionalized crypto-watchdog press or regulatory intervention filling the vacuum.
- The arc from Bitconnect through Skycoin to the influencer era suggests token promotion is converging with the same enforcement questions as securities marketing, where paid shills become discoverable evidence rather than a growth strategy.
The trend: Crypto promotion is migrating from anonymous shill teams to mainstream influencer marketing, and each collapse like Skycoin's converts promotional machinery into regulatory and journalistic evidence.