ICO Scams Hall of Fame
ICOs is one of the most popular ways of the early distribution of tokens and creating the user base of blockchain projects. But we can give an alternative definition. ICOs is one of the most popular ways to clean out people’s pockets giving them nothing in return. Both definitions are fair, and the difference depends on the intentions of the company. The saddest thing is that most people never know if they deal with a fair company or scammers. Let’s have a brief walk among the biggest ICO scams in blockchain history and try to learn some lessons.
Modern Tech
Modern Tech was a Vietnamese company that raised around $660 million from over 32k contributors. Unfortunately for these people, Pincoin tokens appeared to have no value at all. The company managed to vanish without a trace.
Parallelly to Pincoin ICO Modern Tech launched a social network for celebrities. The project was called iFan. After the launch of iFan Pincoin investors started to get rewards in iFan tokens. That’s when all of the founders of Modern Tech have disappeared.
How this trashy company managed to lure so many people? Let’s see. First off, potential Pincoin investors were offered an 8% bonus for bringing new people. Another trick was a promise of monthly 48% profit from the investment. After all, people had to admit that Modern Tech was nothing but sophisticated swindle from the very beginning.
PlexCoin
Launched in August of 2017 PlexCoin’s ICO lasted for 4 months and then was stopped by SEC. PlexCoin promised a nicey nice return of 1,354% to the investors. All the raised money ($15 million) were frozen. Currently, it’s not clear what will happen to the company and the unlucky investors.
Benebit
Benebit used mighty marketing tools and boasted a quality white paper. That was enough to raise millions of dollars through ICO. The feature of their product was merging diverse loyalty programs under their brand. One day it was revealed that all passport data of the company founders is fake. It was the end of Benebit, but unfortunately, the villains successfully disappeared and took the people’s money.
Bitconnect
Bitconnect was promoted as a loan program. BCC referrals were supposed to be the basis of the Bitconnect project’s activity. During ICO company promised high returns (yes, nothing new). Currently, the victims of Bitconnect’s actions come together to sue the founders and return the $700,00 worth of investments.
Centratech
Centratech’s case was especially scandalous because this company hired DJ Khaled and Floyd Mayweather to promote the ICO. The promised product was kind of a debit card platform that allows investors exchanging cryptocurrencies to fiat currencies. When the scam nature of the project was revealed Centratech already snatched roughly $32 million thanks to Khaled and Mayweather. Currently, there’s no decision on what to do with this money, company, and defrauded people. What we already know is that the participating of celebrities in the promotion doesn’t grant trustability to the product. When you trust ads you risk you play yourself.
OneCoin
OneCoin is a sophisticated multi-layered Ponzi scheme. The company was busted in India and some of the European countries. People have spent millions on ICO despite the fact that OneCoin doesn’t even have a public ledger and official license. What makes this ICO one of the top-level scams is that after 2.5 million euro fine in Italy and $30 million fine in China this company keeps existing. If you want to know it, they didn’t develop anything new since the times when their crimes were revealed.
PonziCoin
Now the best name in the game. PonziCoin. The most amazing fact about this project is that PonziCoin was one of the most honest companies in blockchain history. The website of PonziCoin ICO claimed that this project is a scam, but somehow it managed to raise over $250,000 before the founders of the company have disappeared with the money. Can we blame PonziCoin founders? Good question.
TITCoin
You have probably heard that “Internet is for porn” and that “sex sells”. Now we can add that it also raises money for obscure ICO projects. Announced as an adult industry platform TITCoin is yet to offer anything solid to investors. Nevertheless, in the period between 2014 and 2017 TITCoin raised $100,000.
Final Thoughts
The important thing to know is that fair ICO is something not typical. If you see ICO you can be sure that it’s a fraud or at least it has a small chance to fulfill the expectations of investors or the given promises.
