Wednesday, January 20, 2021

ICO dormancy plaguing the crypto industry: Research

The Takeaway:

The crypto boom led people to believe in the digital currency as a get rich quick scheme. This thought has undoubtedly led to a rise in fraudulent activities. Today, a significant number of ICOs stand idle post attaining an enormous sum of funds. This article covers the ascended and evident illicit acts taking place in the crypto industry, making it a toxic place to invest in.

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The crypto industry is undoubtedly slowing down. The decreased amount of investments, sliding hash rates of crypto coins, people preferring traditional money over cryptocurrencies, and increased level of scams, is all leading to push the digital cash in a dark world. 

 

32% digital coins endure dormancy

CoinCodeCap recently analyzed the development activity of more than 2,000 cryptocurrencies. Findings came out representing a low wave in the crypto world. Out of the examined, more than 640 digital coins were entirely inactive and did not commit any code in 2019. Surprisingly, the assets maintaining an action-less state hold a market cap of $415 million. 

 

YoBit and CoinExchange list inactive assets

Proton token emerged as the most noticeable project. In spite of possessing a market cap of more than $80 million, it failed to push new code since 2018. Also, these highly inactive projects are prevalent on a couple of exchanges. YoBit and CoinExchange are top in listing these assets with the former allowing 62 and the latter permitting the trade of 39 coins. These exchanges fail to gain much revenue and earn by charging high fees for listing various coins. 

CoinCodeCap commented, “Crypto landscape is full of lies and empty promises. To make this ecosystem better, we need to weed out projects which are not fulfilling their promises made to investors.”

 

Crypto crooks level up their game

Proceeding from the tradings, the crypto frauds have now attained an upper level. The crypto world is a challenging path to evolve as a healthy, crypto startup project. Intending to manipulate people, the firms now conduct illegal ICOs. This week, an online adult entertainment marketplace, Fantasy Market has been charged by SEC for carrying out a fraudulent ICO. According to the commission, Jonathan C. Lucas, the founder of the marketplace, lured investors to partake in the sale of unregistered digital securities of Fantasy Market (FMT) by reciting several false statements. The business raised $63,000 in cryptocurrency from more than 100 investors. 

As per the lawsuit, Lucas had violated several security laws concerning frauds. The founder has agreed to pay a civil penalty of $15,000 to resolve the charges. 

 

Unregistered ICObox fleeced investors 

The United States Security and Exchange Commission also filed a lawsuit against ICOBox and its founder Nikolay Evdokimov for performing an illegal securities offering. In 2017, the firm sold $14.6 million worth of unlawful tokens to more than 2,000 investors. As reported, the defendants claimed that the tokens would increase in value and the ICO traders would be able to swap them at a discount for other tokens available on the platform. However, today, the ICO tokens are practically ineffectual. 

ICOBox is also charged for acing the act of registered brokers while they were still unregistered by facilitating ICOs that raised over $650 million for dozens of clients. 

 

PlusToken – The exit scam of the year

If Crypto had an award for the fraud of the year, the PlusToken scam would not even need to go on the stage; the award would itself be on its doors. The cryptocurrency Ponzi scheme allegedly took $2.9 billion from the investors and has unfolded as the most giant exit scam ever. The swindle centered around an app where the wallet provider falsely assured the holders an ROI of between 8% and 16% per month, with a minimum deposit of $500 in crypto coins. The future of the platform was eventually sealed on June 28 by the Chinese authorities as they detained six fraudsters involved in the racket.

 

Pincoin Ponzi scheme

In 2018, Pincoin, an ICO operating under the arch of the Vietnamese company Modern Tech, conducted multi-level marketing Ponzi schemes. As reported, it conned $660 million from around 32,000 investors. Pincoin did initially pay cash until January 2018 but then turned to pay out in iFan tokens, and next, the team vanished into thin air.

 

Investors confide in Confido: lose $347,000

In 2017, an ICO called Confido, sold its tokens known as CFD and raised $347,000 from the investors. Confido defined itself as the company developing “smart contracts” to act as an agreement between the buyer and the seller, removing the need of a third party. The ICO commenced through the platform TokenLot, and very soon, everything was out of reach as the company erased itself from every corner of the digital and real world.

Are the stagnant ICOs reported by CoinCodeCap fueling the fire that Crypto is a scam? What are your thoughts?

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Thomas Allums
Thomas Allums
Although Thomas is an experienced writer, he is also a passionate musician who loves to travel often. He is based in New York and loves to spread the word about decentralization throughout his neighborhood.

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