http://www.digitaljournal.com/internet/op-ed-infamous-airbnb-squatter-shows-risks-of-unregulated-e-markets/article/393405

Op-Ed: Infamous Airbnb squatter shows risks of unregulated e-markets

Posted Jul 29, 2014 by Calvin Wolf
The infamous Airbnb squatter, Maksym Pashanin, turns out to also be a Kickstarter fraudster. Is his inglorious rise a wake-up call to the relatively unregulated e-market industry, which ranges from Kickstarter and Indiegogo to couch-sharing startups?
Chesky CEO of Airbnb attends session of World Economic Forum in Davos
Chesky CEO of Airbnb attends session of World Economic Forum in Davos
� Denis Balibouse / Reuters, Reuters
It's like the Wild West in digital form. Popular websites are allowing netizens to exchange services at lower-than-retail rates for everything ranging from lodging to car rental to freelance gigs. Sites like Upstart, Kickstarter, and Indiegogo, meanwhile, connect the generous and well-heeled with the energetic and ambitious, hopefully funding the next wave of innovation. Just like the Wild West was full of innovation, it was also full of fraudsters, hucksters, and back-stabbers.
The rise of infamous Airbnb squatter Maksym Pashanin and his brother Denys is a warning to these popular e-market sites that the Wild West needs more regulation. According to Business Insider, Pashanin has gone viral for squatting in an Airbnb host's house and refusing to leave. Apparently, Pashanin is taking advantage of a California law that allows anyone who occupies a residency for more than 30 days to be a full-fledged tenant who can only be evicted after the lengthy process works its way through the courts...up to six months.
Pashanin paid for the first 30 days of his 44-day stay and continued to occupy beyond the 44th day, resisting the homeowner's efforts to make him leave. When the homeowner threatened to have the utilities shut off, Pashanin threatened to sue for loss of revenue from a job he was allegedly doing inside. Pashanin and his brother are apparently "video game creators," with programming being the work allegedly done inside the disputed residence.
Unfortunately, it turns out that Pashanin has not only defrauded his Airbnb host, but also his donors on Kickstarter. Last autumn, Pashanin raised almost $40,000 to create a video game called Confederate Express, a piece of software that has apparently not been delivered. Since then, Pashanin has struck again, trying to raise funds on Kickstarter for a game called Knuckle Club. Fortunately, it appears that netizens have recognized Pashanin's fraud and have wisely refused to donate.
Sadly, there appears to be little regulation aimed at preventing fraudsters from luring in donors on sites like Kickstarter or preventing fraudsters from taking advantage of hosts on Airbnb. Once money changes hands, the website's obligation is finished, leaving donors swindled and hosts stuck with bad tenants. While greater regulation is not ideal and will stifle the freedom and vigor of many of these e-market sites, a greater threat looms in terms of host and donor panic. Basically, a few bad apples may be all it takes to spoil the bunch and deprive everyone of the benefits of the e-market.
As a prospective utilizer of sites like Kickstarter, I cringe at the thought of prospective donors avoiding the site due to the likes of Maksym Pashanin. It doesn't take much for a tech-savvy fraud to whip up some cool YouTube videos and pitch a product or piece of software that he or she has no intention of completing. While Pashanin got his $40,000, what about the next guy? Someone who is genuine will not be funded because of the actions of a fraud.
For the greater good, e-market sites need to be more proactive about checking the background of users who request either large donations, lengthy stays, or large or complex business transactions. In 2009, for example, the Pashanin brothers were evicted from a San Fransisco apartment by the courts for refusing to pay rent, a huge red flag for a site like Airbnb. And philanthropic sites like Kickstarter might consider a system of timed payouts contingent on progress of the funded project, relinquishing the money in stages to ensure that nobody can take the entire donation and skip town. For example, if you ask for more than a certain amount you can only receive part of it up-front, with the rest coming in installments based on sufficient evidence of progress.
Yes, yes, I realize this is all time-consuming and may wreck the spirit of some of these sites. But, as a potential user of these sites, I would prefer that these sites remain functioning and frequented by generous hosts and donors rather than barren of help, everyone wary of the next Maksym Pashanin.