While the blockchain technology has brought many options for the technological advancements like tokenization, decentralization, smart contracts etc. it has also brought the service of ICOs. There are many ICOs been conducted every day. Every ICO has different platforms but they all have one purpose in common and that is to gather funds in exchange for their tokens.
What is an ICO?
It is an approach to crowdfunding using cryptocurrencies, to collect funds for their venture. Such ICOs are helpful for startups and various ventures. While there are benefits like there is no mediator involved so it reduces the cost of the same, but time and again such ICOs are vulnerable to security and scams. ICOs are easy platforms for the conmen to do fraudulent activities. If you want to be safe while investing in an ICO, learn about How to invest in Initial Coin Offerings.
Below is a list of the top 10 ICO scams happened around the world:
The order of the listings does not imply to the rankings.
1. BITCOIIN (B2G)
Scam of: $75 million USD was raised
By roping in the Hollywood celebrity Steven Segal as their spokesperson, they claimed that their code base would be open source, while it was closed source, and the celebrity had also gone through a backlash from many. If that was not enough they introduced the second generation BITCOIN ICO as well.
Scam of: $70 million USD was raised
Again it had involvement of the famous rapper “THE GAME” and the founder herself was Miss Iowa. They targeted the trending topic of Cannabis legalization in the US supposedly they even invested all their accumulated funds in real estate. They took the advantage of the ICO mania which was all around the world and the rage of Cannabis legalization in the US, which was successful enough to raise $70 million USD until the authorities came into the picture.
Scam of: $6.5 million USD was raised.
Their concept was to scam people by the name of launching a blockchain platform for vegetable and fruits. They took down their website and flee away, however, they claimed that made not more than three thousand dollars.
Scam of: $15 million raised
Their purports included claims of collaboration with Visa and better than Bitcoin concept. It was termed as a “full-fledged cyber scam” by the SEC authorities.
Scam of: $2 million USD raised
The team members faked themselves as the members of Telegram group, who were actually hackers, and convinced people to transact Ethereum for the Telegram private sale.
Scam of: $3-4 million USD tentatively
It was a meticulously planned ICO. They had planned the marketing budget very efficiently and convincingly conned the people while pretending to be real ICO.
Scam of: Raised above $32 million USD
This is again a case of hiring the celebrities to promote their ICOS. The celebrities involved were DJ Khaled and Floyd Mayweather. They falsely declared their partnerships with Visa so that it looks believable and true to the people. They claimed that would be bringing up debit card system for the crypto users so as to convert their crypto into fiat.
Scam of: $300 million USD internationally as per the rumors.
The scam was of the global level and then the creator of the scam was a Bulgarian lady named Dr. Ruja Ignatova. Their strategy was to cover up and avoid the flaws which the previous scams had committed. They made a list of the mistakes done by the previously happened scams and strategized to avoid them. However, $30 million USD were captured and the promoters were apprehended.
9. PINCOIN and iFAN:
Scam of: $660 million USD
No. of people scammed: 32,000 people
Vietnamese company ModernTech launched two ICOs and claimed that the tokens are ERC-20 token. The shocking reality of this scam is that no one from the scam group has been arrested, however, seven people were identified, but they ran away too quickly. The scam was successful and all the conmen made a great escape.
Scam of: $600 million USD
Initially, they made up a story about their collaboration with Visa and also made former world boxing champ Evander Holyfield their spokesperson. To make their stand more strong they further declared that they have attained a 100-year-old FDIC insured commercial bank. The scam was so big that the SEC filed a complaint about them in the US federal court.