Number of ICO Exit Scams Rises but Amount of Stolen Money Remains low
Despite the popularity of initial coin offerings, there are a lot of things to worry about. In fact, it seems the number of exit scams is on the rise as we speak. That in itself is always a worrisome development, but one few people seem to keep an eye on. Despite these exit scams, the total amount of funds collected is still pretty small.
So far, the year 2018 has not been overly positive for the ICO industry. There have been a lot of successful projects, but also some worrisome exit scams. Some of the recent notorious examples include Bitcoiin, PlexCoin. Opair, and Confido. All of these projects raised a smaller amount of money before effectively calling it quits and disappearing altogether. It is not a unique trend in the world of ICOs and cryptocurrencies, unfortunately.
Exit Scams are Still Successful
There’s also the recent Savedroid debacle to take into account. While the team claims they never scammed investors, the jury is still out on that verdict. There are a lot of ways teams can run off with investors’ money, as backers do not conduct their due diligence in most cases. If they did, the scams would not necessarily be successful, or at least, in less spectacular fashion.
Even though the number of exit scams rises, the amount of stolen funds remains small. With all of the exit scams throughout 2018 alone – excluding Savedroid – a total of $8.4m has been stolen to date. It is still a pretty penny, but compared to seemingly legitimate projects raising $50m or more, it is a drop in the bucket. When adding the ongoing and bust Ponzi Schemes to this list, things are a bit direr.
Whether or not this will lead to more regulation of ICOs, remains to be determined. It is evident the industry direly needs oversight, although it may not matter much. It is up to investors and speculators to do their own research in this regard. Until they take these threats more seriously, exit scams will always be successful up to a certain degree. This will tarnish the reputation of ICOs for quite some time to come.
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