In China, found 421 fake cryptocurrencies

In China, found 421 fake cryptocurrencies


The National Council of Experts on Internet Financial Security Technology (IFCERT), funded by the Government of China, published the results of the analysis of fake cryptocurrencies. This is written by

The Council reports that it is using the National Technology Platform to analyze financial risks on the Internet in order to monitor such cryptocurrencies on an ongoing basis, adding: “As of April 2018, the technology platform has detected 421 fake virtual currencies. More than 60% of the servers on which the sites of these currencies are located abroad. The search and tracing of such platforms are fraught with considerable difficulties.”

The Council also explained to what alarming signs it is guided by the identification of fake cryptocurrencies. First, such schemes use a “pyramidal” business model, along with a promise of high profitability.

Secondly, they do not have real code. IFCERT draws attention to the fact that fake digital currencies do not use blockchain, and transactions with their use are not added to the blocks.

Thirdly, they do not trade on high-grade exchanges of cryptocurrencies, but only on “over-the-counter exchanges or specialized exchanges”.

“On such platforms, there is a phenomenon in which prices are largely controlled by institutions or individuals, which allows them to create the illusion of rapid price increases. Users, however, often can not conduct transactions or withdraw cash,” adds IFCERT.

The Council emphasizes that fake cryptocurrencies are not valuable and illegal, adding: “A lot of such platforms do not have their own premises and do not provide information about the business, and their servers are often abroad.” The same factor explains the impossibility of returning funds to defrauded investors.

This week, his research on a similar topic was published by the Wall Street Journal. According to the conclusion of the authors of the material, out of the 1,450 analyzed by them ICO 271 filed “disturbing signals, consisting in the plagiarism of investment documents, the promise of guaranteed income and unreliable information about leadership.” These 271 ICOs were able to collect more than $ 1 billion, and $ 273 million can already be officially considered lost.

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