Whenever you first hear about cryptocurrency then the first thing that comes to the mind is – exit scams. It is a term that directly or indirectly linked to the cryptocurrency.
Exit scams refer to the scams when the startups associated in blockchain technology collect the money of the investors [with the help of Initial Coin Offerings (ICOs)], and then disappear, leaving no ashes behind.
The whole concept is so famous that in 2018, over $100 million funds contributed to the Initial Coin Offerings (ICOs) have been scammed as a part of the exit scam.
Human’s memory is always good, that is why we will have some glimpse on the exit scams happened in 2018 so that you can recall what exactly happened in this year so far.
#1. Savedroid So-Called PR Stunt
As the fluctuations of the crypto market were turning down, one cryptocurrency firm decided to do a ridiculous publicity stunt.
Savedroid, a blockchain startup that claims to raise $50 million with the Initial Coin Offerings (ICOs), heated up the crypto industry with a meme where the project’s founder was seen tweeting arrogantly – relaxing on the beach with a bottle of beer. He wrote:
“Thanks, guys! Over and out … #savedroidICO.”
#2. Crypto-Startup in South Korea Took Off $2.7 Million
Another incident that highlights the memories of 2018 is crypto scam under the name ‘Pure Bit’, where the project founders decided to screw up the investors.
An effective crypto exit crypto was performed where the founders of the projects turned down their website, disappeared and ran away with $2.7 million funds that were generated through Initial Coin Offerings (ICOs).
#3. Prodeum Crypto Exit Scam with twisted Name
This crypto exit scam is one of the most foolish scams that took place in 2018. At the beginning of this year, a crypto startup Prodeum decided to create a fruit and vegetable coding system that will aid in tracking the Ethereum blockchain production.
What more interesting and equally disgusting is the website of Prodeum was replace with a single word ‘Penis’.
One of the project founders said that all the social media accounts, including their website, are the victim of identity theft. This whole twisted game led the firm to get 430 ETH to 970 ETH – worth between $500,000 and $1 million.
#4. Fake Trading Algorithm Led to Trick $4.5 Million
Another crypto startup named LoopX announced to provide a trading algorithm that will automatically secure the most profits. As declared by the associate marketing material where he said:
“Our software handles over 10,000 trades per second and calculates over 100 currencies at a time. Always looking for those opportunities to make profits bigger than 10%, which will payed out to our members on a weekly basis.”
However, this resulted in nothing but a fool idea. The company shut down their Facebook, Twitter, Telegram, and YouTube accounts. The total profit gained from this was 276 BTC and 2446 ETH – which totally worth around $4.5 million.
#5. BitConnect – King of Crypto Exit Scam
The incident of BitConnect might be fresh in your mind. This scam happened in the same year but feels like a year ago.
A Ponzi scheme was used as a source of fooling investors, where BitConnect structured its business with tiers. The company promised the investors to give 40% returns on the funds transferred to the platform.
The system backed by the trading bot and software managed to convince users that infinite return will be guaranteed. But, as soon as the market capitalization shrinks, the company decided to shut down their doors – cut off the investors from their capital. The firm managed to steal the money of the investors in the name of return policy.
All such incidents are life-lessons for the people who are linked to the crypto industry and equally participate in the crypto investments. A new year is approaching with more complexity and fun. Let’s just celebrate this new phase.