EOS Ecology, a Chinese crypto wallet application, had promised users high returns on their holdings, but the app shut down with $50 million of its customers’ funds as users fear an exit scam. Users are reporting that they are unable to withdraw funds amounting to a total of $50 million. Many are now alleging that the project is a fraud and a Ponzi scheme.
EOS Ecology had promised high returns to investors.
When a crypto firm promises an unusually high return on investments to its users, it is a red flag, and this seems to be the case with Eos Ecology. The China-based crypto application in now reportedly shut down as users are complaining that they are not able to withdraw their funds. Other than offering high-interest rates, the firm also claimed that it has an association with Starteos, which is false. Starteos on March 14 told users that there is no connection between Starteos and w.io. Starteos is one of the largest and most trusted block producers on EOS.
EOS Ecology worked like a typical Ponzi scheme.
Initially, the company provided returns to early investors on schedule, which played a role in attracting new users. It has become clear, however, that this was not possible over the long term. On April 20, several users reported that they were no longer able to access their funds. The total amount of user funds in the wallets is nearly 200,000 EOS tokens. EOS activity reveals that funds tied to EOS Ecology and w.io have been moved primarily to accounts called “huobidevice1,” “huobidevice2,” “huobidevice3,” and “huobidevice5.” Each of these accounts has been created by “coldlaregist.”
The total sum of all relevant accounts comes to over $50 million in EOS tokens. The bulk of the funds are held on huobidevice3 and huobidevice5. Despite the names of these accounts, Huobi exchange said in a statement that after verification, the two Huobidevice5 and Huobidevice3 addresses that received a large number of EOS inflows are not Huobi addresses, the Huobi account is ‘huobideposit.'”
