Confido, a cryptocurrency startup which calls itself a smart contract and raised over $375,000 in its ICO has vanished into thin air with investors funds.
The initial coin offering took place earlier this November and TokenLot, which is a platform that facilitates ICO’s took charge of Confido’s ICO fundraising.
The investors were given “contract for differences” tokens which initially had a value of $1.20 on November 14, but is now worth about 2 cents, following the vanishing of the Confido founders.
WHAT IS ICO
Initial coin offering( ICO) is the cryptocurrency version of initial public offering. ICO’s are unregulated ways of raising funds by startups via crowdfunding. A significant difference between ICO and IPO is that in ICO, cryptocurrencies like Bitcoin is the means of payment while fiat currencies are the only accepted means of payment in IPO’s. In an initial coin offering, investors have the opportunity of acquiring a new token whose value is predicted to rise shortly. Investors who believe in the vision of the company will exchange their cryptocurrencies with the new coin or token.
While ICO’s are great ways of acquiring capital by new companies, who have a clear vision of changing the lives of its investors for the better, the ICO ecosystem has become quite risky and scam laden in recent times. This is due to the fact that the ICO ecosystem is yet to be adequately regulated as is obtainable in IPO’s.
NOWHERE TO BE FOUND
In the past few days, all online channels of communication of Confido along with other online assets have been deleted, leaving only a cached version of the company’s Medium post which stated that the Confido team were in a tight corner due to a legal trouble they are facing.
Some part of the post read thus: “Thanks for always standing by us. We have achieved some incredible things these last few weeks, and the crypto space is beginning to notice us. However, we owe you an apology. Right now, we are in a tight spot, as we are having legal trouble caused by a contract we signed. We are trying our best to fight our way through this. As it currently stands, development is delayed until a resolution is found. “
The preceding Medium post has left many who participated in Confido’s ICO in a state of panic and confusion.
TokenLot said in a statement on Monday that Confido has pulled an “exit scam,” which means the company has run away with investors money. TokenLot further noted that it would try its possible best to track down the founders of Confido since some of the ether tokens collected during the ICO was sent to a Bittrex exchange wallet which had earlier undergone a KYC procedure.
BE WARY OF ICO’s
Although like most companies, a law enforcement request must be provided before a customer’s details can be released to the public. In line with the preceding, TokenLot said it would notify the FBI of the scam so they could get Confido founders’ KYC details from Bittrex which would enable the perpetrators of the fraud to be apprehended.
These days most ICO’s are nothing but fraudulent, due to the unregulated nature of the ICO ecosystem. Although it is challenging to distinguish between fraudulent and genuine ICO’s, so the best bet is always to be cautious and do not invest more than you can afford to lose.