$374,000 scammed through an ICO

While cryptocurrencies have bloomed lately, human greed has still managed to splotch it with ICO scams and other fraudulent business ventures. Recently, around $374,000 USD disappeared after an Initial Coin Offering (ICO) was held under Ehereum platform. The ICO ran from November 6^th to 8^th, in which digital tokens were sold to investors over the Ethereum blockchain.

The ICO was held by the company Confido. The company had billed itself as a blockchain-based app allowing a ‘smart-contract’ startup. It labeled itself as an escrow between the buyer and the seller during the transaction. Usually a third party would hold a traditional escrow. However, a smart-contract would eliminate the need of the third party and be fulfilled when certain conditions are met by both parties. During the sale, digital tokens, that represented their investment in Ethereum virtual currency, also known as Ether, were sold by Confido to the interested people. These digital tokens were given as “contract for differences tokens.”

The fraudulent ICO took place earlier this month through the platform TokenLot. On November 20^th, Tokenlot said that Confido had pulled an exit scam. Tokenlot is not in contact with Confido  anymore, and only public information is known. Tokenlot has been searching for information leading to the Confido team by tracking down a few ether tokens, which were sent to a Bittrex account. These tokens were collected during the ICO.

Bittrex cannot release the information of its users without a valid court order. Therefore, Tokenlot is in the process of acquiring the necessary court orders so that they can acquire information regarding Confido's founder from Bittrex. However, Bittrex did not respond to CNBC’s tweet to them regarding this matter.

Joost Van Doorn, the apparent owner of Confido, released a statement just before the shut down of their site. He said that the company was in a tight spot due to some legal trouble. The post said that the company’s legal adviser assured that any contract being signed holds minimum risk, and would not be an issue. However, this turned out to be problematic.

The digital tokens which were being traded for as much as $1.20 on November 14^th, have lost almost 98% of their value. Today, they are worth $0.02, according to Coinmarketcap.

With such news surfacing, Jordan Belfort, notoriously known as The Wolf of the Wall Street, might have been right when he called cryptocurrency “biggest scam ever, such a huge gigantic scam that’s going to blow up in so many people’s faces.”