Cryptocurrency exit scams have conned people out of almost 100M USD

Almost $100 million in cryptocurrency has been stolen by exit scammers, as ICO tokens continue to plummet in value.

Indeed, the figures suggest that ICO scams over the last two years total at least $96.8 million in value, according to data compiled by blockchain intelligence firm Diar. For context, data suggests that blockchain startups have raised over $6.3 billion from ICOs in 2018 alone.

For the record, Chinese company Shenzhen Puyin Blockchain Group is responsible for a staggering $60 million of all thefts. The company raised funds for three different ventures – ACChain, Puyin, and BioLifeChain – neither of which materialized.

Other notable mentions include Cryptokami and NVO, both of which raised respectively $12 an $8 million before seemingly abandoning work on their projects. Cryptokami’s site is now defunct, and NVO hasn’t updated its Facebook page since March. Exit scams continue to plague the ICO space as there is little by means of regulation to ensure the legitmacy of projects being listed, afterall there are no legal obligations in this arena to deliver a product once you have raised secured funding. It’s pretty much a digital wild west as far as the law is concerned.

Generally speaking, exit scams are easy to spot, but this clearly isn’t stopping people from being duped out of millions of dollars. Telltale signs of a dodgy blockchain ICO are plagiarised imagery, fake employee profiles, and heavily plagiarised whitepapers.

As Diar points out, the Wall Street Journal found that 19 percent of all ICOs manifested many of these red flags.

It’s frightening to see such large sums associated to scams where the sole purpose is raising funds, and running away into the sunset, without actually seeing through on their promises. But the story is becoming all too familiar. It’s becoming a process of scheduling an ICO, raising funds, removing the company website, siphoning off the raised capital, and going dark.

It’s clear that we all need to pay incredibly close attention when we are investigating ICOs, the age old adage, “if it sounds too good to be true, it probably is,” still holds up in our wild west world of blockchain and cryptocurrency.

razeiv 2018-09-17 14:32:22 Reply
We always need to be alert