Cryptocurrency exit-scams cost investors almost $100 million

Cryptocurrency exit-scams cost investors almost $100 million


According to Diar, which collects and analyzes data from the crypto market, exit scams (the type of fraud in which cybercriminals squeeze as much money out of investors as possible and then hide themselves) stole from ICO investors 96,8 million US dollars, and ICO-token courses have greatly reduced in price. For comparison, in 2018 alone, blockchain-startups, with the help of ICO, totaled $6.3 billion. This is written by TheNextWeb.

The most malicious exit-scammer can be called the Chinese company Shenzhen Puyin Blockchain Group, responsible for theft of $60 million. The firm attracted funds through three different companies – ACChain, Puyin and BioLifeChain – and none of them as a result has materialized.

Also worth noting the company Cryptokami and NVO, which raised $12 million and $8 million, respectively, before you abandon the work on their projects. The Cryptokami site is no longer functioning, and the information on the NVO website has not been updated since March.

Full list in the table below:

From Diar report, Vol. 2, Issue 32.

The list also includes the LoopX project, which collected 4.5 million dollars before disappeared in an unknown direction, and the Prodeum fruit and vegetable blockchain-startup, the creators of which said goodbye to investors on their website with only one word – “penis” flashed in the news headlines.

Exit-benches continue to poison the crypto-space, because this sphere does not have proper regulation to ensure the legitimacy of money-collecting projects.

In general, to understand whether the exit-scam is before you is often not difficult, but people still continue to be deceived and lose millions of dollars. Eloquent evidences of fraudulent ICO are plagiarism of other people’s images and white paper, as well as fake profiles of employees. As Diar writes, the Wall Street Journal found that 19% of all ICOs have many of these signs.

However, it is more dangerous and difficult to detect those projects that are simply moving forward, spending their capital without haste, but they do not show any work.

According to Diar, token rates of the 10 most successful ICOs that traded in the last 6 months have fallen by an average 93% relative to their highest level. But Diar figures should be taken with some skepticism. Many Twitter users note that they do not take into account the overall growth dynamics.

According to the table below, the rates fell by an average of 93%, but this figure is calculated based on the highest rate of the token that it reached after the ICO. However, if we take as a basis the growth/fall from ICO to the current moment, then the discrepancy will not be so dramatic.

Take, for example, TRON – although the rate of this cryptocurrency fell by 92% compared to its highest mark, it is still higher than the ICO rate. The same goes for Status.

From Diar report, Vol. 2, Issue 32.

As we see, scammers who simply fool investors and collect money, and then hide behind the horizon, not having fulfilled a single promise, manage to appropriate large sums. However, all these stories are like each other: start ICO, raise money, remove the company’s website, withdraw all collected funds and go into the shadows. Obviously, the old good “too good to be true” is still relevant in the Wild West of the blockchain and cryptocurrency.

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