
Exit scammers run off with $660M in ICO earnings - dbasedweeb
https://techcrunch.com/2018/04/13/exit-scammers-run-off-with-660-million-in-ico-earnings/
======
pjc50
> "Investors have been told that they would enjoy a profit rate of 48 percent
> a month from their initial investment, and recoup all investments after four
> months. People would also be rewarded with an eight percent commission for
> every new member they have introduced to the network."

There's your red flags right there.

~~~
ashleyn
This is one thing most people don't understand. If someone is selling you a
financial instrument with >6-7% annual returns, it's as ridiculous as someone
selling you a time machine or the cure to death.

The top 500 companies by market cap don't do much better than 6-7% annually on
average.

~~~
pibefision
Take look at Argentina's market. You can get 20% of return on yearly bonds in
dollars. Yes, its a bubble but its more mature than any kids ICO

~~~
wtvanhest
I know nothing of Argentina finance, but if I take your sentence a facevalue,
my assumption is that they have a high rate of estimated future inflation.

There is no free money in finance.

~~~
notfromhere
Argentina is legendary for bad credit, so that's why returns have to be so
high

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jimrandomh
Dollar figures in cases like this shouldn't be trusted. ICO scammers have an
incentive to make it look like they're getting more investment than they
really are, since that gets them more attention. They can easily achieve this
through self-dealing--taking their own money and giving it to themselves under
another identity. They can even reuse the same money to do this multiple
times; that would leave evidence on the blockchain, but I'm not aware of
anyone who checks for such things.

~~~
jcoffland
And article authors have an incentive to make the numbers as big as possible
to attract the most attention. They happily use the highest wild estimate in
the title.

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Rotdhizon
At this point you really can feel no sympathy towards anyone who gets suckered
into these types of scams. Same thing with facebook scams or
instagram/snapchat pyramid schemes. If you really are that _nice word for
lacking intelligence or any ability to think for yourself_ , then you deserve
what you get in terms of financial loss or social backlash. There isn't even a
target demographic for this, people from all over the board are falling
victim. From old people with their retirement savings to young adults who
spend their minimum wage paychecks on it, all in the hopes of getting a quick
turnaround. That's not meant to come off as mean or condescending, you can
only say to someone "It's okay, everyone makes mistakes" so many times before
you stop feeling pity towards their poor decision making.

A thing to note in my eyes is that different to social media scams, these ICO
scams aren't even being that pushy in terms of advertising. When engaged with
a pyramid scheme, people tend to be pretty aggressive in getting you to join.
With these scam coins, people are willingly going up to them with little to no
previous information and dumping their bucket of pennies in the well.

EDIT: Getting down voted for being blunt. Sucks to lose rep because people
don't like to hear the truth.

~~~
hmahncke
Actually, normal people do deserve protection from financial scams; and they
don't deserve what they get just because they are not as sophisticated as a HN
reader.

~~~
Thriptic
I don't think it takes a particularly high amount or sophistication to google
"ico", see that most of them are scams, and stay away. People shouldn't invest
in things they don't understand.

~~~
BinaryIdiot
You'd think so but literally no one in my family was able to do this.

You're coming from a place of higher-than-average technical knowledge. Many
who do not, especially folks who never learned how to think critically, have
no idea how to verify a claim or to verify that something is what it says it
is. Many, in fact, take what is said on TV as the "correct" thing and rely on
that to help steer their knowledge.

People just see everyone getting stupid rich around them on TV by investing in
"crypto" so they obviously would like to do the same thing. But crypto is
hard. Even the hard core crypto fans have many blind spots.

------
NelsonMinar
I'm also skeptical about the $660M number. To put that in perspective,
Vietnam's GDP is $232B, so this is about 0.3% of Vietnamese GDP. 0.3% of the
US GDP would be about $50 billion.

FWIW most articles I'm finding source the $660M number to the linked Tuoi Tre
News story. Their quote is "The victims said the company had conned them out
of VND15 trillion (US$660.79 million)."
[https://tuoitrenews.vn/news/business/20180409/vietnamese-
cry...](https://tuoitrenews.vn/news/business/20180409/vietnamese-
cryptocurrency-scam-allegedly-deceives-thousands-to-swindle-660mn/45001.html)

I have no doubt there was yet another ICO scam with someone walking away with
the money, but I wonder how much money it was.

~~~
bandrami
The "investors" ( _ahem_ ) are no doubt counting their expected returns as the
amount they are out, rather than their capital outlay.

------
throwawayReply
Did it actually raise 660m or was that the size of the "market cap" when it
collapsed?

if I sell 100 tokens for a dollar then convince someone to buy 1 token for 10
dollars, if I run off with the money I've not run off with $1000 even if it
feels like it for the people left with tokens.

~~~
vehementi
In these situations they sell their bullshit tokens for real money (or
BTC/ETH), so they would have run away with the actual money or something
within an order of magnitude, not some fantasy "market cap".

~~~
CurtMonash
It sounds like they pulled the plug after as little as 2-3 months of supposed
~50% monthly increases. So the chance that the real money stolen is somewhere
in the vicinity of 1/4 the apparent loss seems high.

Your figure of 1/10 to be conservative sounds sadly sensible.

------
joshfraser
Where's the smart contract that collected those funds? I'm really skeptical
about that $660M number.

Filecoin raised $257M and they had the support of a bunch of VCs, top crypto
funds, smart crypto whales, and thousands of supporters around the world.

$660M for a coin no one has heard of? Doesn't add up.

~~~
trappist
Haven't found the ICO contract, but the ERC20 contract says there are 1,912
token holders while OP says there were 32,000 investors.

[https://etherscan.io/token/0xC8a8D2A81cc86b95beb04E5a320D7E5...](https://etherscan.io/token/0xC8a8D2A81cc86b95beb04E5a320D7E53F3c627dd)

~~~
joshfraser
Seems like Techcrunch may have regurgitated some alarmist articles without any
fact-checking. I'm not finding the evidence either.

------
johnrichardson
There's no way they raised $660M. Even $66M would be pushing it. I hope
TechCrunch edits this article with a more accurate number.

Filecoin and Tezos both raised about $200M and were considered massive ICOs,
not to mention they happened in the wealthiest countries on earth and were
heavily backed by institutional investors. It's simply impossible that an
obviously scammy ICO in a relatively poor country raised $660M.

------
aviv
I'm old enough to remember StockGeneration.com [1].

Different decade, different suckers.

[1]
[https://en.m.wikipedia.org/wiki/Stock_Generation](https://en.m.wikipedia.org/wiki/Stock_Generation)

------
jjallen
This is super sad & bad for the space and for those of us that work in the
industry and just want to build real stuff.

$600m is a ton for anywhere, but especially for Vietnam! I hope there is an
international manhunt ongoing.

~~~
banachtarski
Man if only we had regulation! Oh wait

~~~
DCoder
[https://twitter.com/stephendpalley/status/982353358915801088](https://twitter.com/stephendpalley/status/982353358915801088)

------
bhouston
There is another one going around in Vietnam called Polynetwork which is a
clear scam: [https://polynetwork.org/](https://polynetwork.org/)

~~~
myth_drannon
Looks like it was always going down from the initial offering and the price
now is basically 0 [https://coinmarketcap.com/currencies/poly-
ai/](https://coinmarketcap.com/currencies/poly-ai/)

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matt_wulfeck
> _raising $660 million from approximately 32,000 people._

Honestly where is this money coming from? Is there just that much money
sloshing around in the world chasing after these harebrained ideas?

~~~
orthecreedence
> Is there just that much money sloshing around in the world chasing after
> these harebrained ideas?

No, it's probably based off market cap. Let's say I generate 100B tokens. I
happen to con you into buying one for $0.01. Boom, the price of my token is
$0.01 per coin, and I have 99,999,999,999 of them at a market cap of $1B. Only
$0.01 of actual value has been exchanged, but I can now "exit scam" with $1B
in supposed value.

In reality, they probably had a few million, maybe tens of millions at most.
$660M is a ridiculous number, probably only achieved by factoring their stupid
coin's market cap in.

------
ryanbertrand
I don’t understand how we have all this information on the internet and people
still get sucked into these scams. 48%...that is not a realistic guaranteed
return! :/

~~~
rebel
10-15 years ago, I was certain that "bullshitting" people was going to
disappear in the near future. It seemed inevitable that people would just pull
out their phone and fact check any scam or lie. In a bizarre twist, it appears
the opposite has happened.

~~~
alexbeloi
Yeah... with 1000 conflicting versions of any event, it's more difficult than
ever to sift through the misinformation. Then one brilliant soul will say
"aha, I know the solution, I will hire experts and engineers to efficiently
sift through information sources and present people with a version of truth we
can be confident about!", behold the birth of the 1001st version of events.

------
quadcore
_Again we find that the current, unregulated, ICO market is the most
interesting system for parting fools from their money in recent history._

Jokes apart, I think it's a good thing. It's 2018, if people are exposed to
that kind of scam today, they will evolve quickly, especially the kids. They
will develop critical thinking and bullshit detectors. They will stop
believing in advertisement and, more importantly, propaganda.

~~~
s73v3r_
And hopefully remember why we have things like the SEC and securities
regulation.

------
m3kw9
Classic pyramid scheme, I think 660mil in Viet currency?

~~~
learc83
No, that's less than $30k. The article says USD.

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onetimemanytime
_> > "Investors have been told that they would enjoy a profit rate of 48
percent a month from their initial investment, and recoup all investments
after four months. People would also be rewarded with an eight percent
commission for every new member they have introduced to the network."_

Scammers don't deserve the money but fools and their money...

~~~
kolpa
"You can't con an honest person" (Not actually always true, but applies to
many scenarios)

------
jtwebman
How is this different then Bitconnect or any of the other 100's of ICO scams
that have happened in the last year?

------
rs86
It's not that ICOs are bad, it's that there are people naive enough to believe
this kind of shit.

------
johnchristopher
Can anyone help ? I have been trying to find a site that was submitted to HN a
week or two ago. It was a fake site about a blockchain scheme but the author's
intention was to highlight the shortcomings. It was before 1st april.

Thanks :).

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jjallen
I'm especially dismayed that they brought the Ethereum name into it.

Ethereum already gets a bad rap because it's easy to write insecure smart
contracts, if someone uses the platform to pull off a scam that's even worse.

I doubt they even created a dapp or wrote any code though.

~~~
orthecreedence
Maybe Ethereum is stupid for encouraging "tokens" in the first place, and
maybe their name should be dragged through the mud.

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lu11
People buying cryptocurrencies are NOT investors. Period.

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aphextron
I like that we’ve just come to accept daily occurences of billion dollar ponzi
schemes as a cost of doing business. This is great. You crypto people should
be proud of yourselves.

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Dowwie
The story is unbelievable on many levels.

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OscarTheGrinch
Initial. Clown. Outwitting.

~~~
mkirklions
I tried warning people that 99% of alt coins die.

They rather believe in unicorns.

~~~
spookthesunset
> I tried warning people that 99% of alt coins die.

I love this logic. Everything but Bitcoin is somehow a shitcoin. Maybe, just
maybe, Bitcoin belongs in the same stack as all the rest...

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knodi
Greed is a motherfucker.

