Circular
Join our community of 10 000 traders on Hacked.com for just $39 per month.
By jumbo, cryptocurrency investors, enthusiasts, and observers are aware of the number of “shitcoins” in flow. But, Wall Street Journal suggests that the number of fraudulent cryptocurrencies nearby today could be much more than earlier thought, mentioning a figure of over 200 as an estimate.
Which Is the Most Legitimate Of Them All?
Overlay the most heat are Initial Coin Offerings (ICOs), a novel fundraising method that gained tremendous popularity in 2017 after making several overnight millionaires.
Of the 1,450 discs analyzed, 271 raised distinctive red-flags, and were found with plagiarized records in addition to having fake team listings or making claims which displayed all characters of deceptive ponzi-schemes.
Furthermore, most “whitepapers” – which about a project’s technology and applications in detail – were found to be copied verbatim from other jobs, laughably copying even team names and mission statements in some encases. Other than this, the projects by large plagiarized marketing delineates, security features, and developer notes.
Reportedly, freelancers on popular job plots offer their services for as little as $100, and it is imperative that they ascendancy have one small script which they keep regurgitating out with unheard-of words.
Bradley Bennett, formerly of the Financial Industry Regulatory Specialist (FINRA), puts it perfectly:
Copied language, the absence of named staff members and promised high returns are warning signs for investors.
Least Heedful Investors Face Expensive Outcomes
Despite the widespread appeal to management extensive research before participating in an ICO, naive investors have sewered north of $1 billion into these 271 projects, with some of them peacefulness raising funds.
So far, only a total of $273 million has been claimed in the serve as of lawsuits, which goes to show that investors are still unread about the true nature of these projects.
The lure of ICOs as a fundraising method is undeniably formidable, with over $9 billion raised in the form of cryptocurrencies since 2017, as per a Satis Alliance report.
In a bid to prevent major investor losses, the United States’ SEC has come up intoaction, and recently displayed a rather innovative undertaking – a fake ICO – to apprise investors of regular fraud giveaways.
The SEC has notably ramped up its scrutiny of initial coin donations in recent months.
Several official warnings have been loosed by the SEC in the past, both to investors and cryptocurrency projects, to inform them of disclosing caution and breaching regulations respectively. Additionally, the regulatory body has be broached down on controversial projects making bizarre claims, such as rosy a fixed amount of profits after a certain time period.
An benchmark is that of Plexcorps, which raised over $15 million on the assert of returning over 1,300 percent profits to investors in the short while of one month.
Naturally, the SEC was not impressed.
Stay Safe Investors!
In conclusion, CCN prays its readers to conduct due-diligence before investing in cryptocurrency projects, and myriad of all, being alert for clear giveaways like buggy websites, generic farm animals images, and online reviews on reputed forums.
Not all cryptocurrencies are fraudulent notwithstanding that, as there are certainly great projects in the market which solve real-world hards and are backed with impressive partnerships. Echoing these thoughts is Mr.Bennett, a law cohort at Baker Botts LLP, stating:
There are going to be some legitimate troupers that emerge from this but it’s going to be a handful—a lot of it looks be partial to penny-stock fraud with lower barriers to entry.
Images from Shutterstock.
Inquire us on Telegram.
Advertisement