ICO trap robs investors of their money

The prices of popular virtual currencies like Bitcoin and Ethereum are too high, causing many people to choose the ICO investment channel with the expectation of investing little capital but getting super high profits after a short time.

ICO drama and spectacular scams

Similar to IPO (initial public offering), ICO is a form of initial coin offering to raise capital for technology startups. For about half a year now, cryptocurrency exchanges have continuously launched ICO projects to call for capital to attract Vietnamese investors. With the characteristics of low capital outlay (initial issue price is usually less than 1 USD) and high profit potential, many investors have poured money into this channel. However, many investors have had to swallow the bitter pill with ICO.

A cryptocurrency investor said that in October 2017, after hearing the appealing introduction from a cryptocurrency exchange consultant, he invested more than 50 million VND in BitBase's ICO project (code BTB).

“Hearing the introduction through the exchange and through the company's website, I saw that the roadmap to the exchange was very clear (November 1, 2017), with a profit of 7-11%/day. In fact, the price of BTB tokens also tripled from 0.3 USD to 1 USD/token within just a few weeks of offering. However, just a few days after being listed, BTB was taken down. The reason announced by the Company was that it was attacked. As a result, all of my investment money was gone,” this investor revealed.

Similar to IPO (initial public offering), ICO is a form of initial coin offering to raise capital for technology startups.

Not only BitBase, but recently, a series of ICO projects have also cleverly robbed investors of their money, such as Bancor, Confido... Immediately after successfully issuing virtual currency to raise capital, earning hundreds of millions of USD, these start-ups immediately disappeared, leaving investors angry and their dreams of getting rich unfinished.

Just type a few keywords online and you will see dozens of websites posting ICO projects. Experts confirm that this ICO drama is actually a sophisticated scam by some start-ups.

Currently, on the coinmarketcap exchange, there are more than 1,000 virtual currencies being traded. Since the middle of this year, the fever of issuing virtual currencies to raise capital has increased rapidly. It is estimated that in the world, startups have raised billions of dollars from selling virtual currencies. However, fraud in ICO transactions is so widespread that a series of authorities in the US, Russia, Japan, China, etc. have spoken out to warn.

A representative of Kyber Network - a cryptocurrency startup with a Vietnamese CEO - warned: "Up to 90% of cryptocurrencies on the market have no real value and are created for the purpose of fraud. Therefore, investors must carefully research cryptocurrency companies before investing."

Super high profits, constant risk of attack

In addition to investing in ICO projects, many Vietnamese investors also choose to invest in other widely accepted virtual currencies such as Bitcoin, Bitconnect, Bitcoin Cash, Litecoin, Ethereum...

According to cybersecurity experts, with cryptocurrencies that already have an identity, the possibility of being scammed is lower than with ICO projects. However, investing in newly issued cryptocurrencies or widely accepted cryptocurrencies is still very risky.

Bitcoin virtual currency.

Major General Nguyen Hung Linh, Director of the Department of Financial, Monetary and Investment Security (General Department of Security) said that currently in Vietnam there are many websites that buy and sell virtual currencies, but the servers are located abroad. Virtual currency trading activities depend on the information technology system, so there is always a risk of data insecurity...

“If a cyber attack occurs or the network is shut down, the participants will have to bear all the losses. In addition, information about the transaction may be retained, leading to the risk of losing the privacy of the transaction,” said Mr. Linh.

According to experts, there is no suitable advice for all cryptocurrency investors at this time, because investing in cryptocurrency is gambling. However, if you are new to it, do not understand technology, and cannot find information about the founders, investors should choose widely recognized cryptocurrencies, instead of choosing cheap cryptocurrencies or investing in ICO projects.

According to Investment Newspaper