Another effective ICO: a startup raised $ 374,000 and disappeared

The number of ICOs conducted by various companies is growing exponentially. In principle, this can be understood, since the initial placement of tokens is a great way for companies to collect investments. Moreover, the ICO is a practically unregulated area, which allows in some cases to avoid paying taxes and not to get into the bureaucratic funnel of the documents necessary for the normal investment process. Unfortunately, the lack of regulation has another, negative side: investors are practically not protected from fraud. Among the organizations that conduct ICO, there are both quite respectable start-ups and outright fraudsters.

The latter collect money under the guise of a company that has a serious project, and disappear. Recently it became known about the next such case. One of the organizers of ICO collected $ 374,000 (by the way, this is not so much, now many startups collect millions of US dollars during the initial placement of tokens) and disappeared. This amount was collected in just a couple of days - from November 6 to 8.

This is a startup Confido, which did not look scam at all. The organization had a website, had accounts in social networks. Available well-formed documentation, including White Paper and everything else that is necessary in such cases. ICO started on November 6, and after a few days, Twitter account was deleted and the site stopped working. A company representative left a short comment regarding what happened on Reddit. In this comment, in particular, legal problems were mentioned that allegedly prevented Confido from completing his work normally. The same comment was published on Medium, but it was quickly erased .

“Right now we are in a difficult situation, because we have legal problems with the contract that we signed,” said a remote message (a cache on Google is still available). “Most likely, we will be able to find a suitable solution to correct the situation. Unfortunately, we cannot guarantee this with a 100% probability. ” As you can understand, the message was published by Confido founder Joost van Doorn. By the way, LinkedIn-account of this person is also deleted. It may well be that the founder’s personality is a fake, like the entire startup as a whole.

A few hours after the first message was published on Reddit, the second one appeared . Its author is a company representative who, as it turned out, is not aware of what is happening. “I have no idea what is happening. Deleting all of our social accounts and the site is a surprise for me, ”the message says. Also, the representative of Confido believes that all this can really be connected with legal problems of the leadership.

On the other hand, all the project team member profiles found on LinkedIn are fake .

The startup planned to raise about $ 10 million, and as mentioned above, managed to get a few hundred thousand dollars, after which it simply dissolved in the air. The tokens of the company that were really sent to investors are worthless , so those who invested money in a startup are very unhappy. And they can be understood.

"I was deceived. This is a valuable lesson, in all senses, ”says one startup investor. Another said that everything that happens is a slap in the face to all investors.

At the moment, it is unclear what will happen to the already collected funds that went into the wallets of a startup. Cryptocurrency was collected indirectly, TokenLot service , which worked with many companies, was attracted to raise funds. Perhaps this service will have to be responsible for the return of the collected investment. “Only we are now in touch, and we have to answer questions. Confido is a very well-organized scam, ”said Eli Levitt, co-founder of TokenLot.

Whatever it was, the startup did not have time to collect a lot of money. Some companies collected much more, millions of dollars, and then disappeared. Hundreds of thousands of dollars is also a decent amount, but not so many investors suffered. As far as one can understand, they will not return their funds.


All Articles