The ICO Confido, which sold tokens called CFD, attracted $ 374,000 from investors and after that has completely vanished! The startup removed all information from its official website and got rid of accounts in social networks.
Today, the world of ICO and Crypto-currencies is the Wild West from the world of finance. People use this unique opportunity to attract funding in their projects, while others are looking for easy money and take advantage of the lack of uniformity of law.
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So, there is another, negative side: investors are practically not protected from deception.A few days ago it became known about such another incident: this is about a startup Confido, which didn’t look like a scam.
Confido was considered a company that was going to present the world with secure peer-to-peer transactions using smart contracts and tracking delivery.Initially, the tokens traded at $1.20, but as a result of the series of negative events, the exchange rate dropped to about $ 0.02.
The ICO company was organized by TokenLot, which makes fundraising easier. During the ICO, the team managed to raise more than $ 350,000 in three days.
However, in the last few days, it turned out that the whole project is a scam.
On Monday, November 20, users couldn’t enter the Confido website. Later, all project accounts on social networks, such as Twitter, Reddit, Facebook, and Medium were deleted. After that the developers made an important announcement in the blog on Medium, saying that they had some legal problems.
Nevertheless, the public doesn’t believe in such statements: "I was deceived. This is a valuable lesson, in all senses," said one of the startup investors. Another said that everything that happened is a slap in the face of all investors.
Initially, the tokens traded at $1.20, but as a result of the series of negative events, the exchange rate dropped to about $ 0.02.
ICO is a new way of quick financing
As it always happens during a boom, many play in bad faith in the ICO world. Given that abuse is not uncommon in connection with bitcoin and other cryptocurrencies, it is not surprising that ICO attracts too many scammers.
According to Smith + Crown, the organizers of the ICO often bypass the usual rules for raising funds, thereby losing the ability to legally protect the interests of investors:“In order to try to avoid legal requirements that come with any form of a security sale, many ICOs today use language such as ‘crowdsale’ or ‘donation’ instead of ICOs. They also use legal disclaimers and language to the participants that this isn’t a securities sale. It is unclear whether this is sufficient for global jurisdictions to treat it differently from a securities sale. To date, the matter hasn’t been litigated in a court of law.”
So, the main question is: Should you invest in ICO?Yes, if you are willing to put your money at risk for the sake of an idea that may prove to be a failure.