Headlines such as $9million lost each day in Cryptocurrency scams and 80% of ICOs are scams highlight the growing risks in investing in ICOs and rightly point out that any investor should do so only after carrying out due diligence and research. There are endless resources out there to help investors but with ICO fraud being as rife as reported in the two articles above, it can seem like the Wild West out there with cowboys-a-plenty ready to take off with their loot.
With that in mind, below are a number of examples of successful as well as scam ICOs that have made the headlines in the Cryptocurrency world.
The Good, the bad and the ugly.
The Good: Ethereum.
Widely regarded as a pioneer in the ICO world, Ethereum raised $18million in its 42 day ICO. The most successful ICO at the time, Ethereum has since seen rapid growth and is the world’s second most valuable cryptocurrency with an all-time high of approximately $1,400 in January of this year.
Other notable success stories are Neo (raising $4.5m) and EOS ($185m).
The Bad: Benebit.
On the face of it, this appeared to be a legitimate ICO: It had all the key components of a trustworthy project: A Telegram channel with over 9,000 members, a healthy marketing budget and promotions for the pre-sale. However, it was discovered that photographs of the ‘founders’ had actually been lifted from a UK school. This prompted the team to remove all material related to Benebit — the White Paper, website and social media accounts. It is thought that the scammers fled with up to $4million.
The Ugly: Pincoin.
Earlier this year, a team of scammers walked away with approximately $660m of investors’ money. A company called Modern Tech launched the ICO for a coin people knew incredibly little about. The Pincoin website was incredibly easy on the eye yet gave no indication of what the token actually intended to do. Despite this, in excess of 32,000 investors felt propelled to part with their cash in the promise of a 48% monthly return. The company did make good on this return, in the form of another token called iFan. It was then that the seven team members vanished without trace walking away with just under $10million each.
This final example is possibly the most fascinating ICO ‘scam’ since the birth of the crowdfunding platform. Savedroid had the lot: a well administered strong community, an extremely credible, visible team and founder at the forefront of the project. The project screamed legitimacy, so much so that investors parted with approximately $50million in order to ‘participate in the Airdrop and become a Crypto Millionaire’ as written by Savedroid’s CEO, Yassin Hankir. Investors were left aghast when after raising the $50million, the founder posted a tweet thanking his investors, saying “over and out” accompanied by a photo of him enjoying a beer on the beach. Another day, another ICO scam right? Not on this occasion as only 24 hours after the ‘over and out’ tweet, the founder released this video explaining that the Savedroid ICO isn’t a scam after all but a legitimate project. Hankir faked the scam, carrying out the stunt to highlight the vulnerability of ICO investors to such practices. Whilst unconventional, and perhaps losing the trust of a number of investors, the stunt has raised awareness of the due diligence that must be sought before committing to any investment.
Genomes.io is one start up that falls into the first of these categories. With its ICO due to launch later this year, the company is looking to raise funds to develop its genome sequencing technology. Genomes.io boasts an extremely informative website, detailing a comprehensive roadmap and a thorough Whitepaper outlining how any funding will be utilised.
Whilst acknowledging the importance of the ICO in the early stages of its growth, Genonmes.io also focusses on its long term project and how it will develop technologies to grow the business. It boasts a transparent team of individuals with extensive experience in a number of fields. The start-up also places great emphasis on building community utilising Telegram, Twitter, Facebook, Reddit and Linkedin to keep (would-be) investors abreast of any updates throughout the journey.