With the increasing number of ICOs happening these days, it was only a matter of time before rogue players decided to take advantage of hungry investors with fraudulent schemes. In this article, we will go over three obvious ICO scams that were able to defraud investors of their hard-earned cryptocurrency.
The Opair ICO was one of the earliest noted scams in ICO history, happening back in 2016. It raised more than US$1M with the promise of decentralized debit cards.
It should have been pretty obvious from the start that a no-name group of individuals could not overhaul the banking system and provide decentralized debit cards that would work anywhere right off the bat, but with more and more exciting new Blockchain technologies hitting the markets, people were understandably hopeful.
Things started to unravel when users pointed out that the Opair team seemed to have fake LinkedIn profiles, and despite having provided tons of personal information and pictures, refused to attend events or go on video calls for “privacy reasons.”
Not long after the Opair token was listed on exchanges, lots of coins were rapidly dumped, the main website was taken offline, and the team went silent.
Sleuths on BitcoinTalk.org later determined that the con man behind Opair later launched at least one other scam ICO known as EBITZ (a Zcash clone) as the scammer used some of the same server DNS records for the new website.
There is still a bit of debate as to whether BitCad was a downright scam or if it was just a failed attempt at something larger. Nonetheless, a lot of people lost a lot of money regardless.
BitCad raised US$5M promising to be, well, everything. The BitCad ICO project aimed at replacing nearly every component of modern business, government, trading and transaction facilitation and gave very few insights into how it was going to make that happen.
Despite having boasted a pretty large team initially, once the ICO took place the project saw team members depart quite rapidly, and announcements from the group ground to a halt.
The team was supposed to deliver the first component of their platform back in May of this year, including a smart contract constructor and biometric verification. By October, they were also supposed to launch a dispute resolution department, a multistakeholder token model and a decentralized trade engine. None of these have been launched yet.
Some people are still holding their breath hoping for signs of life for the BitCad platform, but this is another ICO whose team was either selling snake oil or took on a project that was way over their heads.
Authorship was an ERC20 token that raised US$1M with the promise of creating a system for writers, translators and journalists to earn and exchange ATS tokens for their work.
Participants should have been skeptical when the token’s creators mentioned that their desire to build out this token stemmed from their experience running a supposed bookstore. It doesn’t take a rocket scientist to realize that a terrible e-commerce website that only sells pencils and blank notebooks isn’t much of a “bookstore.”
What’s more, the team also listed their address as “11015 York Road Cockeysville Maryland” which is the home of an entirely unrelated “Precision Auto Mechanics” business which seems to have no association with the coin creators.
What really did in Authorship, though, was the failure to distribute tokens from the bounty and referral programs. It wasn’t until then that users realized they had been scammed and started digging into the addresses above.
Had Authorship distributed the tokens, we arguably may have categorized this one as just a failed attempt at an ICO rather than a downright scam.