ICOs fever spawns massive scamsSince Bitcoin’s inception in 2009, people have become increasingly enamoured with the idea of Blockchain technology. Over time, developers and business minds began creating their own solutions with this decentralized ledger technology.
This led to the development of Ethereum and other virtual currencies, with the former in part responsible for a boom in initial coin offerings (ICO) in 2017.
As an ICO is essentially a round of public finding and is typically launched by a tech startup which sells inhouse cryptocurrency tokens to prospective investors, these investors buy tokens in the hopes that company will launch its product and the tokens will grow in value.
An ICO is not unlike an initial public offering, which is when a traditional company makes its share available for purchase to the general public. In fact, this is where the ICO moniker stems from.
Given that there are no promises that an ICO will make good on its future plans, investors take a leap of faith when they part ways with their money. This of course has led to a plethora of scams billed as ICOs, which have seen thousands of investors left out of pocket.
Here are five of the biggest ICO scams in history.
1. Pincoin and iFan
2.OneCoin
3.Bitconnect
4. Plexcoin
5. Centratech
Pincoin and iFanThe most recent large-scale ICO scam grabbed headlines in April. Two ICOs, run by the same company operating out of Vietnam, are believed to have swindled around 32,000 investors of a combined $660 mln.
The company in question, Modern Tech, packed up its offices in Ho Chi Minh city last month, making off with investors money. The scam is believed to be the biggest in ICO history.
A number of investors protested outside the vacant offices in the city on April 8, after the company refused to process cash withdrawals. The city’s administration has ordered police to investigate the fraud.
Both ICOs have been classified as multi-level marketing scams. iFan was advertised a social media platform for celebrities to promote their content to fans. Meanwhile Pincoin was promising 40 percent monthly returns on investments made. The project claimed to be building an online platform encompassing an ad network, auction and investment portal and peer-to-peer marketplace built on Blockchain technology.I am a Vietnamese citizen and have witnessed many people lose a lot of money for Pincoin and iFan. I feel quite sad when people do not thoroughly study the knowledge of cryptocurrency, this leads to bad guys taking advantage, and they lose an opportunity to invest in a very potential market. After the above cases, the people of Vietnam when asked to cryptocurrency, the majority will think of fraud, this is a rather sad situation. I hope that the Vietnamese government will soon have a clear legal framework for cryptocurrency, so that it can no longer be used by bad guys
Reference source:
https://cointelegraph.com/news/unpacking-the-5-biggest-cryptocurrency-scams
Show Posts
