How to make millions by holding an ICO?
The initial placement of coins is an event to finance the project for its implementation. The peak of ICO popularity was in January 2018 (according to Google Trends). During that period, several blockchain projects were launched daily. For 2022, most of them have depreciated or been abandoned by developers. But some startups closed immediately after the ICO. They are called scam projects. Diar researched the cryptocurrency market and calculated that in the first 2 weeks of August 2018 alone, about $68 million of investor funds were stolen.
Top 5 high-profile scam cases
Throughout the history of the cryptocurrency market, many blockchain projects have been closed. It is impossible to name the exact number of scams. However, there are data on the most high-profile cases. They are presented in the table below.
This company launched 2 different projects – iFan and Pincoin. Their ICOs were held from November 15 to December 15, 2017. iFan developers have been creating a social network for celebrities. Through the platform, the latter had to share the details of their lives for a reward. And the Pincoin team did not disclose the product at all. The specialists stated that they are preparing a financial platform where users can receive passive profit.
Modern Tech was registered in Vietnam. xwp price Most investors are citizens of this country who believed in “their” developer. As a result of the scam , about 32,000 depositors suffered, the total amount of losses was $660 million. Victims gathered at the organization’s office, which aroused the interest of the police. She found out that the headquarters closed more than a month ago.
The project offered a promising idea – to create an infrastructure for the emergence of mobile mining farms. The initial offering of tokens began on December 15, 2017, and ended on January 15, 2018. In its course, it was possible to raise $100 million. The company offered the following:
- Transport container with mining equipment . The startup wanted to produce mobile trailers for the mobility of a cryptocurrency mining farm. This would allow equipment to be transported cheaply in the event of government restrictions. Mobility can also be used to quickly access inexpensive electricity.
- Farm management systems from anywhere in the world. Moreover, the company offered a platform that links different mining centers via satellites. Users were promised to provide remote control.
- own cooling system . The developers stated that it is 40 times more effective than others.
As a result, the company reported that CEO Matthias Westmann stole more than half of the money raised. In addition, the blockchain startup was shut down, leaving investors with nothing. Contributors filed a class action lawsuit against the organization. The court ruled that there were no grounds for accusation.
Puyin Blockchain Group
It is a Chinese company founded in 2018 by Jia Wang. In addition, under her leadership, 3 blockchain projects were created:
- ACChain. Furthermore, it is an open source technology for converting physical assets into digital ones. Moreover, its creators promised crypto investors a stable growth of the ACC token by increasing the number of products.
- Puyin Coin. Furthermore, Represents a token tied to a supply of a rare variety of pu-erh tea. In addition, the company claimed to own a significant portion of it. The investors’ money collected through the ICO was spent on the purchase of their own token. This led to its growth (from $0.07 to $1.57).
- BioLifeChain. The project was engaged in the development of a platform for pharmaceutical organizations, biomedical institutions and equipment manufacturers. weth price The service being created was intended to store and record the supply chains of services, treatment procedures and their results.
The total amount of fees was more than $60 million (according to some estimates – about $100 million). More than 3,000 crypto investors were affected. All 3 projects were closed. As of June 2022, none of them has resumed work. Chinese police arrested 6 people on charges of fraud and speculation in the price of a financial asset.
The company was going to maintain mining farms, sell devices and repair equipment based on its own blockchain network . During the first and only stage of the ICO, 45 million TWT coins (about $27 million) were sold. They were available for purchase from October 1 to October 31, 2017.
The startup closed immediately after the sale of coins. As it turned out, he copied the work of another company – Giga Watt. The ToTheMoon project completely stole the White Paper (white paper). Moreover, Giga Watt spoke about the theft on October 7, 2017. But many people only became aware of this after the ToTheMoon scam.
The leaders of this company calculated that the approximate turnover of the escort market in the world is more than $100 billion a year. However, in most countries, sex services remain illegal. As the creators of Eros.Vision considered, crypto assets can solve the problem. The logic is simple: no money, no prostitution. The developers were preparing a platform for paying for intimate services in cryptocurrencies. The collection began on July 10, 2017, and ended on the 23rd of the same month. The startup raised more than $20 million in 2 weeks.
Eros.Vision showed investors what the future platform will look like. It would allow clients to track the locations and prices of escort services. And workers could receive instructions on how to get to the customer on the map.