We’ve all seen the BitConnect memes by now (if you haven’t, Google it ASAP) and read all about the ICO scams of years past. Yet, even with crypto scam awareness at an all-time high, innocent people are still being stripped of their precious money. But don’t worry. You don’t have to end up like these people because you’re about to get educated on some of biggest ICO scams in history. Hopefully, by the end, you can spot one from miles away.
ICO SCAMS: PLEX COIN ($15 MILLION)
In December 2017, the United States Securities and Exchange Commision (SEC) received a complaint regarding PlexCoin founder Dominic Lacroix. Allegedly, Lacroix was running a scam ICO that guaranteed investors a 1,354% return on their initial investment. He had a team of fake experts on his project and covered up all traces of his criminal past. In the end, PlexCoin took a total of $15 million from its investors but Lacroix never made off with the money. Thankfully, the SEC stepped in and froze all $15 million from this ICO scam. As you’ll see next though, not all criminals get caught.
ICO SCAMS: BENEBIT ($3-4 million)
At first glance, Benebit had a unique concept. They wanted to use blockchain technology to create a customer loyalty program similar to frequent flyer miles. Even for investors that did their due diligence said Benebit looked legit from the beginning. They had an active, moderated Telegram channel with over $9,000 members, a marketing budget of over $500,000 and even a long list of promotions for the token pre-sale. The whitepaper was detailed and well constructed, the concept was innovative and the Benebit team did an excellent job generating hype. However, everything quickly took a turn for the worst.
Eventually, someone noticed that the team photos on the white paper were stolen from a UK boys school. Furthermore, passport details provided by all the founders turned out to be fraudulent. Benebit quickly took down their website, social media accounts, and white paper once they were exposed. They were able to pull off the exit scheme and run away with about $3 million to $4 million.
ICO SCAMS: PONZICOIN ($250,000)
While $250,000 is not much compared to the other ICO scams on this list, PonziCoin is worth mentioning. You might think it’s crazy that people actually investing in an ICO called PonziCoin but its’ true (and also a bit funny). PonziCoin advertised itself as the world’s first legitimate Ponzi scheme. If that sounds like a joke, then you’re right. PonziCoin started off as a gag and even mentioned on its’ website that it was a scam. Still, people invested over $250,000 in this product. In the end, the owner ran off with all of it. Big surprise right?
Hopefully, these examples taught you a thing or two about ICO scams and how to spot them. While BestRate makes sure to only include legitimate cryptocurrencies on our platform, it never hurts to do your own research before investing. The more you know the better it is for everyone.