The Five Biggest ICO Scams
ICO scams are the black sheep of the crypto-asset industry, and these sheep are quite numerous. In 2018, it was estimated that 81% of all ICOs are scams. The ICO market still lacks regulation, so scams prove to be resilient, adapting to new trends and tendencies.
Luckily, most ICO scams fail during the first stages because people are very selective, and scammers have to be more inventive than ever to attract “investors.” Still, there have been some really big scams, which we will now look at.
Ifan and Pincoin
The largest ICO scam so far took place in April 2018 and was conducted by one company that launched two projects: Ifan and Pincoin. This company was a sheer marketing scam. These cheaters convinced 32,000 people to “invest.” After that, the owners magically disappeared with more than $660 million. Ironically, Pincoin’s slogan was “Sharing is Caring.”
The Onecoin scam investigation took more than 18 months. Five countries issued special reports warning investors about the Onecoin cryptocurrency. In the end, justice won. Chinese authorities have seized over $30 million from the company.
Many of you have heard about Bitconnect. Bitconnect was a typical Ponzi scheme. The company had a landing page that promised investors an unbelievable ROI. It all sounded too good to be true from the start. Authorities later estimated that $700,000 of investors’ money was lost for good. Well, for Bitconnect’s owners, it was a good thing.
Plexcoin was even crazier. It promised 1,300% in monthly returns. This promise should have been a huge red flag for all investors and cause for them to stay away from that insanity, but many were still convinced to invest in this ICO. Luckily, the SEC (the US Securities and Exchange Commission) has classified the Plexcoin cryptocurrency as a security token, thus freezing the company’s accounts and stopping its operations completely.
CentraTech was endorsed by superstars such as Floyd Mayweather and DJ Khaled, so the company was handed numerous ready-made audiences. However, these celebrities were also notorious for promoting partnerships with Visa and MasterCard, which ended up not being true. CentraTech’s two founders were later arrested on fraud charges, pressed by their own ICO, which had managed to raise more than $32 million.
Stay away from scams. Choose Tozex!