Algorithm of Action for Victims of Scam ICO

scam ico

The market for initial placement of coins is saturated with fraudulent projects, which initially promise to “change the world”, but after receiving funding, they stop being in touch. There are, of course, those which simply are not able to fulfill their obligations, and the product for which the investors’ money was spent is not necessary for anyone. Some particularly brazen scammers removing their site, leave on it not quite censorship messages, as it was with the Lithuanian startup, which wanted to “bring the blockchain” into the vegetable and fruit industry.

In this article, we’ll talk about what you need to do in order to get your money back if you have already invested it in a fraudulent ICO.

Contents:
(please, click the topic to scroll down to it)

  1. Is it real to return your money if you’ve invested in a scam ICO?
  2. What to do in the beginning? Collect evidence
  3. Who to sue?
  4. What do you need to know about the court?
  5. Conclusion

1. Is it real to return your money if you’ve invested in a scam ICO?

As practice shows, surely, there have been similar precedents in history, but to a greater extent they concern only the United States and Canada. For example, in 2017 on the initiative of the SEC, the founders of the scam project Munchen returned 15 million dollars to their depositors. Another example, the organizer of the cryptostart PlexCoin Dominic Lacroix was arrested, sentenced to 8 weeks of imprisonment, and fined personally for 10 thousand, and his company for 100 thousand dollars.

The Securities Commission is actively working in this field, but, unfortunately, outside of North America it is not yet particularly developed. For example, in the CIS countries no ICO scammers have been caught yet. But, despite this, there is still a chance to get your money back. Please read this material to know what to do in such an unpleasant situation.

2. What to do in the beginning? Collect evidence

So, unfortunately, you have already realized that you gave your money to criminals, what should you do? To begin with, you need to collect as much evidence as possible:

  • screenshots of correspondence in Telegram or other messengers;
  • copies of e-mails;
  • white paper and road map of the project.

If you personally talked on the phone with the organizers of the ICO, then you need to contact the provider to give you a printout of your calls. If you have a personal contact in offline, you must specify the place, date and time of the meeting. If this happened in a public place, it is likely that the fraudster’s face has got into the surveillance cameras.

3. Who to sue?

The overwhelming number of ICO projects has a similar structure. Often, in order to start the production and sale of digital tokens, the organizers register a special issuing company. As a rule, they are created in the Seychelles or the Cayman Islands or in Estonia and Singapore. Unfortunately, finding out data about an issuing company is a rather difficult task. The only place where you can find out which legal body is in charge of this project is an agreement to sell tokens or Token Sale Agreement.

But, it is worth noting that a registered issuing company cannot conduct operational activities, and it is even more complicated to find any information about who conducts it than about an issuing company. Of course, you can try to look for tracks through the project team, but if the organizers of the ICO have created a scam from the very beginning, then they hardly indicated their real names there. Most likely, charges will have to be raised against the issuing company.

4. What do you need to know about the court?

The good news for victims of fraudulent ICO is that there are virtually no “loopholes” in the world where financial criminals can remain in the shadows. Banks from different countries of the world cooperate with each other and transmit information about the movement of money; therefore, to hide a large amount of stolen money every year becomes more difficult.

The bad news is that defrauded investors can demand financial compensation only through local courts of the countries in which the issuing company is registered. Litigation is not a cheap pleasure:

  • Estonia – 7-8 thousand euros;
  • The Cayman Islands – 30-50 thousand dollars;
  • Singapore – 80-130 thousand dollars.

These figures do not include government fees and other related costs. In order for “battle to worth the blood,” the amount of lost funds must significantly exceed the costs associated with the court. An alternative way to save money in this matter is to file a collective claim. For this it is necessary to collect in one place a certain number of the same deceived investors and to divide the costs equally.

5. Conclusion

There are a lot of scam projects on the ICO market, so it’s quite difficult for an investor who is starting not to get bogged down by criminals. But even if you have become a victim of swindlers, albeit low, but still there are the chances of getting your investments back. It is necessary to adjust to a lengthy lawsuit, which will also require financial injections from your side.

How to Spot a SCAM?

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Bomb Bitcoin: A New Scammers’ Scheme of Getting Cryptocurrency

Scammers are becoming more and more resourceful in making up new ways of obtaining cryptocurrency, in particular Bitcoin. This scheme is quite simple: the criminal sends an email where it is pointed out that if a victim does not send $20,000 in Bitcoin within a specified time period, then the former denotes a bomb inside the building where the victim’s company is. The culprit also sends the Bitcoin addresses, in the following email, such an address does not exist.

It is just impossible not to respond to such threats due to some moments in history, so the whole offices are now being evacuated as this scam spreads.

Here you can see the full text of the email:

“My man carried a bomb (Hexogen) into the building where your company is located. It is constructed under my direction. It can be hidden anywhere because of its small size, it is not able to damage the supporting building structure, but in the case of its detonation you will get many victims.

My mercenary keeps the building under the control. If he notices any unusual behavior or emergency he will blow up the bomb.

I can withdraw my mercenary if you pay. You pay me 20.000 $ in Bitcoin and the bomb will not explode, but don’t try to cheat -I warrant you that I will withdraw my mercenary only after 3 confirmations in blockchain network.

Here is my Bitcoin address : 1GHKDgQX7hqTM7mMmiiUvgihGMHtvNJqTv

You have to solve problems with the transfer by the end of the workday. If you are late with the money explosive will explode.

This is just a business, if you don’t send me the money and the explosive device detonates, other commercial enterprises will transfer me more money, because this isnt a one-time action.

I wont visit this email. I check my Bitcoin wallet every 35 min and after seeing the money I will order my recruited person to get away.

If the explosive device explodes and the authorities notice this letter:

We are not terrorists and dont assume any responsibility for explosions in other buildings.”

The New York Police Department (NYPD) reacted to such emails and made an official statement on Twitter, stating that such threats are considered to be “not credible”:

The FBI has also tweeted calling for public’s vigilance:

Our editorial board strongly urges not to believe such threats in order not to become a victim of the heinous scams. If you are hesitating if this email is real or not, please, call the police. We remind you

The Most High-Profile Scam Projects of 2018

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Cryptocurrency Prices Today, December 14: Cryptocurrencies Are in the Red Zone Again

crypto prices

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency prices

According to the online platform Coingecko, Bitcoin (BTC) lost 3.4% over the past 24 hours. The price at the time of writing is $3298 per coin.

Cryptocurrencies moved to the red zone:

Bitcoin Cash lost 11.17% over the past 24 hours and costs $82 per coin;

Ripple fell by 1.89% and is $0.29 in price;

EOS minus 4.67%, and its cost is $1.88;

Litecoin decreased by 2.35%, and its price is $23;

Cardano lost 4.17%, and its value is $0.028;

Stellar dropped by 6.46% and costs $0.10;

IOTA minus 4.53%, and its cost is $0.24;

Dash lost 4.67%, and its price is $61;

Monero became cheaper by 1.61% and costs $42.

Over the past 24 hours, Ethereum lost 3.95% and continues to decline. The coin exchange rate is $85, according to Coin 360.

The total market capitalization fell to $104 billion. Bitcoin accounts for 55% of the total volume. In monetary terms, this is $57 billion.

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The Most High-Profile Scam Projects of 2018

The unfortunate fact, that the ICO market is dying. According to the Satis Group data, more than 81% of the market is a dead projects. The ingenuity of crypto fraudsters was the cause of investors lack of confidence.

It is worth talking about the most prominent scams, that might have destroyed ICO in 2018 as a transparent manner of investment.

Ifan and PinCoin – $660 million

This two crypto startups took the first place, just because they are running money scams of Vietnam Modern Tech company.

The founders promised 570% annual investment. Which sounded well for investors. Because everybody want a high income.

It was impossible to resist from Modern Tech offers, because the marketing was brilliant. The project gave a bonus per each engaged investor.

Now we can tell that initially it was an obvious scam. But no, the crypto fraudsters planned everything to a small detail. But in the end, word always gets out. The mass action in front of the Modern Tech office was triggered by the fact that cryptocurrency media began to publish information about the dark deeds of the company. During the mass action, investors demanded a refund.

In the end, 32 thousand of investors were cheated and the founders escaped with $660 million. Ironically, Ifan and PinCoin were guilty, but have not been punished for the crime.

PlexCoin – $15 million

The United States Securities and Exchange Commission (SEC) undertook the scam situation. That’s why it deserves attention.

Scam projects on the ICO market is like an infection which should be treated at the beginning. The PlexCoin was cured before it caused a significant damage.

The creators of PlexCoin promised a great profit for the investors. This project promised 1300% profit per month. “PlexCoin will be the first cryptocurrency by capitalization, which will eliminate Bitcoin”, said creators. This assumption was a trigger for the SEC.

Dominic Lacroix, the creator of this scam, was charged and entailed to legal responsibility  with “willful distortion provided to investors” by French Financial Markets Regulator (AMF). Following the example set by AMF, the SEC filed a complaint and demanded to suspend the ICO.

During the investigation of the project it was suspended by a lawsuit. Without accepting the restrictions and continuing the sale of fake project tokens, Lacroix was fined $10 000 and deprived of his liberty for a two months.

PlexCoin has earned about $15 million. Ironically, the fraudsters were fined $100 thousand.

BitConnect – presumably, several millions

This is a fine example of fraud field. For two years, it was pulling out the money from gullible investors. BitConnect was launched in 2016 at the peak of hype.

The point of deception was simple: “Invest more – gain even more”. They promised that if they don’t withdraw the funds for 120 days then the profit will be 365%.

Due to the fact that in December 2017 the cost of the BitConnect token was $463, the states of Texas and North Carolina have turned their attention to it. They made the accusation due to unregistered distribution of securities. This reduced the price of the token by 90% and became $ 5.92 per coin.

But, after 2 years of existence, in January, the project disappeared from all the exchanges, and investors were left with nothing,according to the preliminary estimates, they have lost several million dollars. And of course they filed a class action amounting to $700 thousand.

Divyesh Darji managed project from Surat, India and was arrested in the summer of 2018 during the investigation.

Benebit – from about $3 to $4 million

The criminal schemes of Benebit for the ICO market were just perfect, unlike the projects presented above. Everything was at a high level, the project held top places in ratings, there was high activity in social networks, the PR manager did a titanic job. The Benebit activity was brilliant.

But they were revealed by smallest detail. It was because of  photos which they took from the school site, which were noticed by an unknown person. After this all got out, the creators turned off the site, accounts and went into hiding.

During the investigation nobody would think about verification of the authenticity of documents. It turned out that the passport data used by the promoters for work was fake. Another outstanding problem is the rating: how did he get such high marks and who did let that happen?

Conclusion

This is TOP scam projects which should become a lesson to investors. They made a list of “finest scam of 2018” by The Coin Shark, only for the uniqueness of fraud methods.

For example, in ICO Ifan, PinCoin and PlexCoin the investors were attracted with high profit. They were so blind that they did not notice the warnings of the experts.

PlexCoin was the first scam, in which the SEC interfered. As for PinCoin and Ifan they are extraordinary. Since the creators have been found, but not punished.

Benebit startup was unique by the fact that $500 thousand were invested in it under the guise of professional marketing. On the example of this project, we can see the gaps in the system of regulation of IСO.

BitConnect surprised us by the fact, that its financial pyramid was so obvious that it allowed to hide in plain sight. This is a good example of aggressive marketing and the greed of investors in getting money.

In fact, man’s recklessness is the root of the absence of confidence problem to ICO and not such projects. Everyone thinks that this will not happen to himself. But it will, if you are not reasonable and do not check the information about the project in which you intend to invest.

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SEC Obliged AriseBank Creators to Pay Indemnities and Penalties Amounting to $2,7 Million

Jared Rice Sr., the former CEO of AriseBank company, and the former operating officer Stanley Ford, did not admit their guilt in conducting the fraudulent ICO. According to U.S. Securities and Exchange Commission (SEC), they both agreed to out-of-court settlement.

The U.S. Federal Court obliged them to pay $2.26 million as a compensation for damage, both $184,76 thousand as a fine, in addition to $68 thousand for expenses. As well as, in addition to pay penalties, they could be sentenced to a life ban from leading the projects or participating in the issuance of securities.

Reportedly, Rice did not have access to FDIC insurance and had no partnership with Visa, to offer banking services in Texas. Moreover, Rice has spent investors’ money for his own personal use, while repeatedly talking to mass media about the “non-existent” advantages of AriseBank. In addition, the police believe that Jared Rice Sr. hid from the investors the fact of his previous conviction for fraud and accusations under other charges.  

We want to remind you, that recently SEC have declared their intention to fine social media celebrities who promote scam-ICO in social networks.

SEC Is Going to Fine Social Media Celebrities Who Promote Scam ICOs

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Saudi Arabia and United Arab Emirates Will Release a Joint Cryptocurrency

As reported by the local news media, the Saudi Arabian Monetary Authority is cooperating with the Central Bank of UAE in order to develop their own blockchain, which will be the basis for the joint digital coin. The new currency will be used for cross-border transactions between these two states.

This is probably the first time ever that witnesses the cooperation of monetary authorities from different countries on this topic and we hope that this achievement will foster similar collaboration in our region,” said an Abu Dhabi official.

The cooperation is currently ongoing, no specific dates as to when the development will be finished have not been released so far. The innovations in the financial sector will involve only banks and institutional investors, not the regular customers.

We remind you:

Ripple Technology Will Soon Be Implemented in the Biggest Bank of Saudi Arabia

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Cryptocurrency Prices Today, December 13: BTC and Other Cryptocurrencies Remain Stable

crypto prices

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, Dash, Monero: Cryptocurrency prices

According to the online platform Coingecko, Bitcoin (BTC) remained stable over the past 24 hours and slightly increased in price – by 0.2%. The price at the time of writing is $3415 per coin.

Cryptocurrencies changed in price very slightly:

Bitcoin Cash lost 2% over the past 24 hours and costs $96 per coin;

Ripple dropped by 0.78% and is $0.30 in price;

EOS added 1.91%, and its price is $2.01;

Litecoin minus 2.04%, and its cost is $24;

Cardano grew by 0.06%, and its value is $0.030;

Stellar lost 1.81% and costs $0.11;

IOTA dropped by 0.53%, and its cost is $0.24;

Dash fell by 1.06%, and its price is $65;

Monero decreased by 2.06%, and its rate is $43.

Over the past 24 hours, Ethereum lost 0.56%. The coin price is $90, according to Coin 360.

The total market capitalization is $109 billion. Bitcoin accounts for 54.9% of the total volume. In monetary terms, it is $59 billion.

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