Most people have heard about Confido, the ICO that blew up last week. More specifically, the ICO’s team successfully scammed investors out of a few hundred thousand dollars. What’s more, a lot of those investors will not be reimbursed. People who stored their currency on the KuCoin exchange, however, will receive their money back, as the company is paying users out of its own pocket.
Confido ICO Scam has Major Repercussions
It was only a matter of time until the ICO industry saw its very first scam blow up. While some people still claim Tezos may fall into this category as well, it remains to be seen how things will evolve for that particular coin offering. In the case of Confido, however, the ICO quickly turned into a major shitshow once the developers announced they had pulled the plug on the project altogether. As a result, the CFD token price quickly dropped by over 95%, and a lot of people were left with a very sour taste in their mouths.
With so many investors losing a lot of money, it is evident there are some issues which will need to be resolved in the future. Since there will be no significant legal action taken against the Confido team – it is still an unregulated industry, after all – at least one token exchange is doing the right thing. More specifically, the KuCoin exchange will reimburse Confido investors with money out of its own pocket.
This is a major decision in the history of cryptocurrency. After all, Kucoin has no legal obligation to refund its customers, since the company was not responsible for creating the tokens in question. However, it was one of the very few platforms where CFD tokens could be traded soon after the ICO had completed. In a way, that makes them liable for financial damages suffered by CFD holders. By making this decision, the company will avoid any future legal repercussions from this debacle.
Since KuCoin has been unsuccessful in its communication with the Confido team, its decision is all the more impressive. Unlike other exchanges, this trading platform has gone to great lengths to successfully make a positive impact. The company will shut down CFD trading as of November 30th, and anyone who has trades open at that time will receive compensation. For every CFD held, 38 Satoshi will be credited to user balances automatically.
Users will be able to withdraw this money at any given time after the 30th, and there will be no penalty for cashing out these funds whatsoever. It is unclear how many tokens are stored on the exchange right now or how much money the company will lose as a result of this sudden decision. Aside from that, KuCoin will avoid other repercussions, as the goal is to keep its users happy and keep its business operational.
All of this goes to show the ICO industry will continue to cause a lot of problems in the coming years. With so much money being invested in projects which have no working code and seemingly less than honest intentions, things are not looking all that positive. We may see a lot more of these incidents in the future, as plenty of exchanges trade ICO tokens pretty quickly after the crowdsale is over. This industry will undergo more rough patches sooner or later, though; that much is evident.