Why earn hundreds of US dollars on currency difference if you can make millions by creating your platform and motivating investors? The initial costs of creating a legend, the basic development of a cryptocurrency code, White Paper, advertising is inevitable, but it pays off a lot when money is poured into the project even at the time of PreSale. What then? Never mind. The project can be abandoned under various pretexts. And you can disappear altogether with investors’ money. Wallets are anonymous and finding developers will not be easy. ICO fraud is a common type of earnings lately.
How do scammers earn on ICO
- PlexCoin. From August to December 2017, Dominique Lacroix managed to attract about $ 15 million. US investor money. At this time, new projects appeared like mushrooms after the rain, because investors in full confidence massively invested money, without delving into the essence of the idea. Lacroix offered unreasonable income over 1300%, juggling calculations with the help of “experts”. The ICO was only stopped after a SEC complaint that saw signs of fraud on the platform. This is one of the few cases of fraud ICO, when the money managed to freeze and almost completely return to investors.
- Benebit. The platform was based on the aggregation of customer loyalty programs in various transport companies. The developers have created their Telegram channel with 9,000 subscribers, invested in advertising more than 500 thousand dollars. The United States was able to convincingly promote its idea. Later it turned out that the team on the project site is fictional, and the photos are students of one of the universities. After the ICO fraud was revealed, the developers quickly collapsed the platform, removing everything, including the website and social media accounts. And disappeared along with 2.7 – 4 million dollars. United States.
- Opair, Ebitz. Both projects have one founder, which has not yet been found. The idea of startups was to create decentralized systems for debit cards. And before users found fake data, the developers have already disappeared with an amount of about 2.9 million dollars. United States.
Some interesting facts:
- For 2017, ICO scammers have attracted more than $ 1 billion. US investor money.
- Only 272 million dollars. The United States has become the subject of litigation. The rest of the investors are either resigned to the loss, or do not lose hope.
- Of the 1,450 tokens that appeared in 2017, in 271 cases, there were clear signs of fraud: documents copied from other projects, non-existent team members, abstracts falling under the characteristics of the Ponzi scheme. Projects abandoned by developers for reasons other than fraudulent are not taken into account.
Analysts predict that in 2019 the number of frauds with ICO will increase (although there are no statistics for 2018 yet), as capitalization falls, and lovers of easy money does not decrease.