Deceptions, frauds and headaches (part 2)

Today we continue with the scams and now, with what we find more is with ICOS (Initial Offers of Currency) that try to raise funds with dubious ends. It is difficult to trust today and this is sad, because the idea of ​​being able to carry out a project supported by a Blockchain community through “the tokenization of an idea” … this concept promised an improvement by putting the advance of technology in the hands of community.

But it could not, it has been impossible thanks to “the paratroopers”, the “exploited”, “enlightened” who broke the system by deceiving people, users. They arrived at the end of 2017 with the news of the rise of Bitcoin and begin to pretend to be part of the community and know how to do things using “bombastic” words. Does it sound like? I call them “Paratroopers” and they are everywhere, trying to get satoshis to users of cryptocurrencies for anything. But let’s continue with the ICOS.

After the “Hype” of this system based on the creation of the Ethereum network token where many projects were successful and real others disappointed us:


PlexCoin ($ 15 million)

PlexCoin’s ICO was suspended in December 2017 by the Securities and Exchange Commission (SEC) in response to an official complaint that founder Dominic Lacroix was defrauding US and Canadian investors. The complaint alleged that Lacroix was announcing an astronomically high return of 1.354% (which the SEC determined could not be delivered), prompting a group of fake experts to bring legitimacy to their project, and trying to hide their past financial crimes, which They included swindling the investors in a microcredit venture.

Benebit ($ 2.7 – $ 4 million)

Benebit claimed that it used a Blockchain token system to unify customer loyalty programs, such as frequent flyer miles. This ICO had all the attributes of legitimacy, including a moderate telegram channel with more than 9,000 members, a marketing budget of more than $ 500,000 and promotions for pre-sale of tokens. With a novel concept, a serious white paper and well spent marketing dollars, the Benebit team was able to generate a lot of publicity and investors began to buy.

However, things started to go wrong when someone noticed that the photos of the team seemed to have been stolen from a British school for boys. The passport data provided by the “founders” were false. After this revelation, the team that was behind the scam started throwing down anything related to Benebit, including the website, the white paper and the social media accounts. Estimates vary, but it is believed that scammers have gone with at least $ 2.7 million and up to $ 4 million.

Opair and Ebitz ($ 2.9 million)

A motivated community of small investors who invested money in Opair and Ebitz are trying to locate a mysterious developer known only as Wasserman, the apparent mastermind behind two ICO scams that scored a combined total of 388 BTC.

Opair promoted a decentralized debit card system using its own token, XPO. Users discovered that the LinkedIn profiles of some of the team members were fake and Opair quickly disappeared, but not before generating just under 190 BTC in their ICO in the summer of 2016.

The Ebitz website was removed soon after, but the ICO managed to gather about 200 BTC before disappearing; although many users speculate that the BTC came mostly from developers to provide a “fake volume”, or the impression that many people had already invested in the project in order to increase confidence and attract other investors to buy their token

REcoin and RDC ($ 300,000)

At first glance, REcoin (real estate currency) and DRC (Diamond Reserve Club) tried to do something ambitious and bold: create a cryptocurrency that was backed by real-world assets: real estate and diamonds. Its founder, Maksim Zaslavskiy, said that both start-ups had all the staff, had hired lawyers and had already established relationships with retailers and investors, but none of that was true.

The SEC alleges that neither REcoin nor DRC had “real operations”, that both startups had misrepresented their total investment level, and that none of the proposed projects had tokens or anything to do with Blockchain. The SEC decided that REcoin and DRC were not ICOs and that they were indeed securities, which led to Zaslavskiy’s arrest on September 29, 2017. According to the SEC, Zaslavskiy managed to raise about $ 300,000 before being captured, despite the fact that He initially said that the funds raised from both ICOs amounted to more than $ 2 million.


PonziCoin ($ 250,000)

Yes, PonziCoin is a true cryptocurrency, and yes, some very naive people were separated from their money after investing in it. More surprising still, the most recent PonziCoin, which calls itself “the first legitimate Ponzi scheme in the world,” is actually the second PonziCoin that exists. The first came out in 2014 and earned about $ 7,000 in cryptocurrency, which according to some estimates could have been worth more than $ 2 million today.

Another PonziCoin project appeared in 2017 using the same web address.

Are there still ICOS projects honored?

Yes, they do exist. As I indicated at the beginning, this system can mean “Tokenize ideas” giving power to the community. But you have to take into account measures to enter a project safely.

The project must have a White Paper that explains what solutions it will offer and a Roadmap that accounts for the future plans of the project. Generally, the White Paper of the projects that launch an ICO specifies the portfolio in which the resources of the offer will be deposited. Is the custody portfolio in the blockchain verifiable? Who manages it? If this information can not be obtained or corroborated, something may not go well. In addition, the form in which the funds will be deposited must be specified, avoiding possible errors by the platform that is used.

Before investing we must ensure that the ICO has

-Route map,
-Information of its members

It is also necessary to ask how the funds will be managed. A fundamental element is to know how the distribution of the tokens will be, what will be the total amount to be collected, what will be allocated to the ICO, what will form the reserve capital and what will the developers keep.

The project must also specify how the funds raised will be used, and even though detailed information is not expected, if there are central lines of execution.

It is interesting to know if there are project alliances with renowned exchange houses in the community. If not, if they are planned for the future. How involved are you in the community?

And of course, it is not too much to consult the specialized forums … as always, ask, ask and ask.

Enric Martí

Enric Martí

Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff...on rehab