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Why fall 10,000 investors in ICO scams?

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the Benebit was one of the last cases of fraud in the ICO market ICO . Investors had invested more than US$ 2 million, before it turned out that the project was only a “fake”.

Benebit: Promised an loyalty network for dealers and users

was the project to develop a network of customer binding. Dealers should submit specific offers to its customers, pay cashback.

As Benebit disappeared

it was surprising for many investors as the project site only a short time after finishing of the ICOs was no longer available.

In the anonymous 4chan -Forum, which is very popular especially among ITlern and hackers, investigators had launched investigations of ICOs. So they found out that the LinkedIn profile of the CEOs have received recommendations of several accounts of Benebit, which belonged to the same person. The project had praised also with an outstanding team of developers that may have had links to Google and Goldman Sachs. It turned out that the images used for the team have been stolen from a British school .

Why remain ICO scams long undetected?

Of course, the question why ICO scams are feasible in this and higher orders of magnitude, and why the wrong information were not previously exposed arises.
It is known that ICOs are bound (yet) much lower regulatory framework than other forms of investment. It is relatively easy to set up an ICO scam, because it requires only a basic knowledge of technology and the project can be disseminated anonymously.
On the other hand, it is the task of the investors, to examine the projects. It allows to speculate that just the simplicity of the investments causes that projects be examined not in detail. Because there is no small group of large investors, which invests in the project, and in the backhand a precise due diligence and performs a pure verification of facts. Instead, the investors is very fragmented – that can trigger the feeling that nobody feels responsible for the verification of facts and relying on the swarm intelligence. Often, ICO scams were discovered in advance, Benebit-ICO, however, shows most recent example that many a black sheep can still achieve investments in millions of dollars.


Max Kops

 Max Kops Maximilian Kops works as an analyst and writer for BTC-ECHO and is specialized in questions to the technical development of Blockchains as well as to FinTech startups. He is also expert in the analysis of initial coin offerings (ICOs). He studied Business Informatics and began Bitcoins in the living room of his parental home to mines at the age of 17.

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