⭐ Features

Top 10 ICO Scams

  • Eric Eissler
    ⭐ Features

    ICOs boomed in 2017, but so did the scams. Here is a rundown of the biggest ICO scam heists

Top 10 ICO Scams
Cover image via u.today

If 2017 is known as the year of the ICO, then it will also be known for the year of the ICO scam. Over the past few years in which ICOs have been running, there have been some scams here and there.

However, with all the attention that crypto started to receive in 2017, this limelight cast a shadow for the scammers to hide in and grow. With some good web development and marketing skills, scammers were able to swindle millions of dollars from poor investors.

Let’s have a look at some of the biggest scams, ranked by amount of money stolen.

1. Pincoin and iFan $660 mln

Two coins under one company called Modern Tech, which is headquartered in Vietnam, but the coins are located in Singapore and Dubai, respectively, might just have become the largest ICO scam in history.

The two coins combined have suckered some 32,000 investors out of more than $660 mln when they refused to make cash payouts.

On calls from the duped investors and some local government backing, the companies have gone silent, the first sign of guilt. Should it be proven that they made off with that much money, they will be the largest ICO scammers to date.


2. Plexcoin $15 mln

This Quebec-based scammer got the book thrown at him by Canada and the US in a cross-border scam that allegedly raised more than $15 mln.

The scammer and founder of Plexcoin, Dominic Lecriox, promised investors that Plexcoin would be able to do the same things Bitcoin can do, except his would be much faster.

This was back in the days before Bitcoin launched the lightning network, which significantly sped up transactions and reduced the abhorrent miners fees the ballooned over the last quarter of 2017.

While Canadian courts fined his company $100,000 for contempt of court and a two-month jail sentence, the US and SEC are still trying to get a piece of him, however, still held up in court.  

3. Bitcard $5 mln

It is hard to say whether Bitcard had malevolent intentions when it launched all the way back in 2014, with big promises to completely overhaul business, government, trading and transaction software.

While it had a good hook to catch and reel in investors, it was lacking a way to go about doing what it promised.

There was no white paper and inconsistencies on the website. When complaints started to appear, the team vanished and so did the $5 mln they raised after the ICO.


4. Opair and Ebitz $2.9 mln

These are two ICOs that were launched by one clever scammer, only knows as Wasserman to defraud investors not once, but twice in a unique scheme that tied the two together via domain rerouting.

Opair was to be a decentralized debit card system that ran on its own token. Ebitz was rerouting its domain though Opair. Opair was shut down after some investors doing their due diligence found out LinkedIn profiles were fake. But Ebitz, which billed itself as a better Zcash, ran a bit longer before shutting down and vanishing with almost $3 mln total between the two.

5. Benebit $2.7 mln

Benebit was going to offer a way to get more points, similar to credit card rewards with tokens through this scam. However, fake LinkedIn profiles did these scammers in, too.

They stole photos from an all-boys school and used the photos to create the team on LinkedIn. I guess some investors were tipped off by how young the team was and that they all wore the same clothes. Nice try, but the scammers did not think that one through very well.

6. Bitconnect $700,000

While Bitconnect had been accused of being a Ponzi scheme a few times before, it finally stuck when the SEC moved in ordered a cease and cease and desist against the company. Users of the platform were able to lend and make interest on Bitconnect tokens, which had a Ponzi-based referral system.

Since its closure, Bitconnect is facing a class-action lawsuit from users who were duped out of their money.


7. REcoin and DRC $300,000

Two coins one creator, sound familiar? Real Estate Coin and Diamond Reserve Club (DRC) were supposed to take the next step and be backed by real-world assets, real estate and diamonds, respectively. However, founder Maksim Zaslavskiy overclaimed too much and the SEC came in shut him down and arrested him because his two companies were, in fact, empty shells, and the ICOs were considered securities and not related to the blockchain. Zaslavskiy was arrested in late September 2017. The SEC has an ongoing investigation into this case.

8. Confido $375,000

Not much to report on this “smart-contracts” based hoax, which never came to fruition because the founder said that he was in some legal troubles, which were unmanageable and that he had threats on his life.

Perhaps the two are related? If you steal other people’s money there are bound to be legal implications and threats of death. Think twice before you commit fraud!


9. PonziCoin $250,000

Why on earth would you invest in a coin that bills itself as “the world’s first legitimate Ponzi scheme?!” Well, there were enough duped investors to dump a quarter million into this Ponzi scheme.

This was intended as a joke and perhaps a hard lesson to those out there who don’t do research on what they invest in. According to the website, the show is over and the money has been returned? For a while it was funny.

10. Karbon $200,000

Karbon was supposed to be a decentralized social marketplace. Is that similar to the Facebook page where you and buy and sell things with your neighbors?  

However, what it turned out to be was just a poor folk depositing money into an account with no hope to receive anything in return, little did they do.


The fastest way to get crypto news is to follow our Twitter. You won’t miss a thing! Subscribe.

About the author

Eric Eissler is based in Chicago and works in higher-education administration and finance. He is a freelance writer covering blockchain technology, fintech, cryptocurrency, the oil and gas industry, and international politics.

👓 Recommended articles
📰 News

Top Bitcoin Miner Warns – Bitcoin’s Privacy Features Are ‘Quite Poor’

  • Yuri Molchan
    📰 News

    The head of a major Bitcoin mining pool says that Bitcoin privacy is weak and must be improved to prevent BTC from avoiding governments’ clampdown

Top Bitcoin Miner Warns – Bitcoin’s Privacy Features Are ‘Quite Poor’
Cover image via www.123rf.com

The CEO of one of the largest BTC mining pools, Poolin, has recently stated in an interview that Bitcoin privacy has to be improved. The current privacy features make BTC vulnerable to potential regulatory bolt tightening, says he, as reported by Forbes.

The Poolin mining company was set up by several former employees of BTC.com – a world’s major mining pool, a subsidiary of Bitmain. Among them was the Poolin’s current CEO Kevin Pan.

“Bitcoin’s privacy features are quite poor”

Over the past years, developers have suggested several ways to improve Bitcoin’s privacy. However, those were rejected by the community, since they would hard such major things as security, scalability, etc.

A good example here is Confidential Transactions that were among those suggestions. They disguise the amount of BTC sent in transactions. However, the integration of it was rejected, since it could have had a negative impact on the public verifiability of the present BTC supply.

Kevin Pan says that privacy is much more vital for a crypto asset development than scalability. Pan says:

“There is no other big question if the privacy issue is solved.”


Ripple Dispels XRP FUD Allegations, Q3 Report Blames Twitter Bots

Ripple Dispels XRP FUD Allegations, Q3 Report Blames Twitter Bots

Governments may start controlling BTC miners

The company CEO believes that in theory, authorities or law-enforcement agencies may start telling miners to block certain address from receiving funds or sending them. However, in that case that would have to be 51 percent of the BTC network.

Pan believes that unless a solution to this problem is found soon, governments will get a chance to prevent transactions to certain addresses from happenning.

“What is more troublesome now is if government or law enforcement departments begin to create a blacklist of transaction addresses, it will make certain transactions unable to be packaged.”

“In fact, these can be done. But if there is privacy, you can't know who the address belongs to, and you can't determine how much the amount is, and there is no way to control the currency system. So for me, Bitcoin is basically no problem if the issue of privacy can be solved.”


Bitcoin Block Number 600,000 Was Mined — What Does It Mean for the Crypto Industry?

Bitcoin Block Number 600,000 Was Mined — What Does It Mean for the Crypto Industry?

China plans to clamp down on BTC miners

Previously, U.Today reported that Inner Mongolia, an autonomous region of China, plans to ban all the numerous mining pools located there soon.

Since this region is one of the biggest local crypto mining areas, some believe that China is about to ban mining of all cryptocurrencies ahead of the so-called ‘China Coin’ launch.

Do you think that poor Bitcoin’s privacy features could indeed bring down regulatory control over BTC one day? Feel free to share your view in the comments section!

The fastest way to get crypto news is to follow our Twitter. You won’t miss a thing! Subscribe.

About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today.

👓 Recommended articles

This site uses cookies for different purposes. Please set your preferences in Cookie Settings and visit our Cookie policy for more information on how and why cookies are used on this site. Click here for cookie policy

Cookie settings