ICOs (Initial Coin Offerings) are one of the most important facets of Ethereum, responsible for propelling the cryptocurrency’s value to its values of today. These are the cryptocurrency equivalents of community-backed investments and startups – not unlike Kickstarter, but based solely in the crypto world. Demand for Ethereum usually sees vast increases in volume after a promising ICO goes live (or in preparation for it), and is one of the premier channels for value to be chained towards this cryptocurrency. However, as is usually the case – and one needs only look towards Kickstarter as an example of this – there are both success and disaster stories to be met in this space.
Case in point of a disaster, Ethereum startup Confido has recently made headlines both for its $375K ICO, and after it surfaced that the entire initial coin offering was nothing more than a scam. Confido claimed to be a blockchain-based app for making payments and tracking shipments, and as is usual in ICOs, it sold digital tokens to investors over the Ethereum blockchain in an ICO that ran from November 6 to 8. Last Sunday, the company started erasing all marks of its short, profitable foray into the ICO world: it deleted its Twitter account and took down its website. A company representative posted a brief comment to the company’s (now-private) subforum on Reddit as well as Medium, citing legal problems that prevent the Confido team from continuing their work.
“Right now, we are in a tight spot, as we are having legal trouble caused by a contract we signed,” the message stated (a cached version of the Medium post is viewable). “It is likely that we will be able to find a solution to rectify the situation. However, we cannot assure you with 100% certainty that we will get through this,” wrote Confido’s self-proclaimed founder, Joost van Doorn, whose only presence in the Internet, via is LinkedIn account, has since seen deletion as well.
Confido tokens, which had a market cap of $10 million just last week, are now worthless. TokenLot, a website that specializes in enabling startups to put out their ICOs, is really the only hope of resolution for the investors. “We’re the only remnant online right now in terms of people contacting us asking for answers,” said Eli Lewitt, co-founder of TokenLot, to Motherboard.vice over the phone. “These were very good scammers.”
Sources: Motherboard.vice, TrustNodes