ICO exit scams have become quite common these days. While authorities are doing the best they can to shut down some of these pump and dump schemes before they run away by themselves, some of these scam projects still succeed in disappearing with their investors’ funds. The latest ICO scam is LoopX ICO, which made a total of $4.5 million.
LoopX on the Run
Cryptocurrency startup, LoopX, has suddenly closed shop and vanished into space after raising millions of dollars from investors.
The LoopX project promised its investors huge returns with its one of a kind trading algorithm. At present, all its social media accounts have been wiped out except for its bitcointalk account which was last active in December 2017.
In a cached version of its website, the criminals stated that investors donated a total of 276 bitcoin and 2,446 ethereum altcoin. The LoopX ICO had five rounds, and each of those series met its fundraising targets.
A thread posted on its bitcointalk account reads:
“After developing over months and testing successfully with great profits, we can release now with great profits, we can release now with great algorithm. This software will give us all the opportunity to make more money online than we could ever do in real life.”
The LoopX team never ceased giving its participants a false hope. They kept all communication lines active until they vanished, “Our software handles over 10,000 trades per second and calculates over 100 currencies at a time. Always looking for those opportunities to make profits bigger than 10 percent, which will be paid out to our members on a weekly basis.”
In its roadmap, LoopX had stated that its lending platform would go live in February 2018 and this statement made investors confident in the platform unknowing to them that the owners were planning their exit.
While initial coin offerings remain a viable fundraising method by startups and also an avenue for investors to make good money in a relatively short time, there have been numerous cases of scam ICOs in recent times.
Projects like BitConnect, DavorCoin, REcoin, and Bitstrade have all been shut down by regulatory authorities for illegal activities, while others like Confido, Prodeum, LoopX and many others have pulled exit scams.
The blockchain and cryptocurrency ecosystem is here to stay and will continue to surge in value. Therefore until ICOs get fully regulated all over the world, scam ICO projects will still be around.
The Best Bet
Never feel lazy to conduct your research before pumping your money into any ICO project, try as much as possible to check out the backgrounds of its founders. Often, the more credible and famous its founders are, the less likely it is that the ICO is a scam project.
Above all always remember not to invest your life savings in cryptocurrencies because just as cryptos can make you rich overnight, so also they could make you wretched overnight.