Expert’s Note on the five biggest ICO Exit Scams
The world’s preponderance of financial market is been firmly regulated as fraud and extortion is rapidly burgeoning nowadays. People are utilizing latest technologies without being aware of the wickedness entangled in these technologies. The venturing swindlers are spinning towards innovative ideas to tackle innocent people. As cryptocurrency is decentralized or unregulated means for transacting currencies, it is apparent for scammers to execute their deadly plans.
As cryptocurrencies are blooming in the market, it is predicament to eradicate their usage in our lives. Basically, Crypto imposter targets to urge “unwitting investors” to purchase fake coins by ceding fiat currencies or cryptocurrencies. Typically, a project can be defined as a scam, when money collected during a pre-ICO or ICO is been embezzled and simultaneously the team crumbles forever. Therefore, the fraud can claimed to as preplanned project and investors are aisled to be prey of the plan. This article spotlights on all “ICO exit” than thefts, hacks or Ponzi schemes.
a. PonziCoin ($250,000):- PonziCoin is a genuine cryptocurrency in the market. PonziCoin coin was introduced in the year 2014 and raised around $7,000 in cryptocurrency and few predictions claim this amount to be worth of $2 million today. It alleges to be the first legitimate Ponzi scheme and is the second PonziCoin to exist.
Another, PonziCoin project aroused in the year 2017 by utilizing the same web address. At beginning, it was known as hoax and featured a public and open admission on its website. Despite of this fact, few investors still kept on investing their funds and a project which was considered to be a scam and raised $250,000. The founder of PonziCoin project eloped with the money collected.
b. REcoin and DRC ($300,000):- REcoin and DRC (Diamond Reserve Club) executed a desirous and enduring plan. Basically, it created a cryptocurrency which is been supported by real-world assets — real estate and diamonds. The founder of REcoin and DRC Maksim Zaslavskiy alleged that the startup is well-organized with management team and its legal advisors. He claimed to have tied up with retailers and investors but later was proved to be false.
The SEC team asserted that REcoin and DRC had never featured any real operations. These startup firms had misrepresented and the projects, tokens were never associated with blockchain, All these information collected by SEC led cops to arrest Maksim Zaslavskiy on September 29 2017. Bestowing to SEC, He was caught for collecting $300,000 and stated that the funds raised from ICOs amassed to over $2 million.
c. Opair and Ebitz ($2.9 million):- Opair and Ebitz was founded by Wasserman, a credible creator and collected an estimated amount of 388 BTC. An enthusiast team of investors who funding their money into Opair and Ebitz are striving hard to route down the perplexing developer. Opair endorsed a decentralized debit card system by utilizing own token called XPO.
Ebitz was slowly turned down by the users. The ICO manage to huddle about 200 BTC before vanishing. There are few speculations that these BTC were funded by providers to fake volume and encourage people to invest on the same. The users claimed that the LinkedIn profiles of team members were spurious and members disappeared.
d. Benebit ($2.7 million — $4 million):- Benebit adduced to utilize Blockchain token and merged customer loyalty programs like aviator. The ICO had featured all embellishment which includes a Telegram channel with 9,000 members and had a marketing budget of over $500,000 for endorsing their token pre-sale.
The things went wrong when a user observed that the pictures of team appeared to be stolen from UK school of boys. The passport information provided by the founders was also fictitious. Gradually, team began eliminating all the information relating to ICO such as website, whitepaper and social media accounts. The scammers are estimated to fetch away $2.7 million.
e. PlexCoin ($15 million):- The US Securities and Exchange Commission (SEC) deterred PlexCoin ICO on December 2017. SEC received an officially complaint that founder Dominic Lacroix was circumventing American and Canadian investors. The complaint urged that Lacroix was endorsing a tremendous high return of 1,354%.
SEC blanched $15 million which was collected by the ICO from its launch in August 2017. Later, the founder was incarcerated by cops and the parent company was fined $100,000. Nearly $810,000 is been held by payment processing company called stripe and rest of the amount is been located to various cryptocurrency wallet which rapports to Lacroix. PlexCoin is known to be a largest attempted ICO exit scams in the history of cryptocurrency ever.
Few queries that are been canvassed are as follows:-
Nowadays, ICO Scam are broking out as fire in the market and scammers collect dubious income from investors. The time-strained in token sale of ICO arouses lust in investors to invest in the ICO and earn income from the same. There are questions which a user can analyze before investing in ICO, few of those are mentioned below;
1. Read the whitepaper of ICO. Does the concept makes any sense?
2. Is product, launching ICO resolving any problem? Is it making any business sense?
3. Thoroughly go through the team’s information and their experiences. Try to get in contact and resolve your queries. Dig out their history, LinkedIn profiles and previous professions.
4. Look for forums to obtain rightful information about cryptocurrency community. Try to figure out if something is fishy and have a sharp eye for red flags.
5. See that company is planning an ICO by utilizing a trusted platform. Escrow team will provide an additional layer of protection and ensure to receive the promised tokens.
Escrow acts as a neutral person or any meditor. They are custodian of funds and assurer of translucent conducting ICO.
6. Glance on company ratings and their ICO. In case the new project isn’t rated it might be considered as a Scam.
As Cryptocurrency are growing day by day, the investors must cautiously invest on the right ICO’s. It onerous to detect scam and real ICO so Investors must make sure to find authenticity of the ICO. Investors must be wise before funding their money into new projects.
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