ICOs are getting a rather bad name for themselves, as ICO fraud continues to make headlines all over the world. It really is a pity, considering the good that so many ICOs aim to do with Blockchain technology.
It is thought that as much as $660 million was lost in ICO scams by as many as 32,000 investors. The ICOs that were at fault in this particular instance was Ifan and Pincoin. Ifan is from Singapore and Pincoin is from Dubai, but both start-ups decided to prey on the people of Vietnam with their crypto scams.
It has been concluded that both ICOs, which were under the control of Modern Tech, a Vietnamese based company, were indeed multi-level Ponzi schemes, AKA scams! Both ICOs have the common characteristics of Ponzi schemes, which include very high promises, vague conditions and
And token buyers were none too impressed. In fact, they demonstrated their dissatisfaction in front of the Modern Tech offices headquarters in Ho Chi Minh City on Monday the 9th of April. And the demonstrators are rightfully upset – if it is proved that the companies did steal $660 million worth of token-buyers cash, it will make it the biggest Ponzi scheme in the ICO world to date.
The first statement that Modern Tech made said that they were not to blame and they were merely the official Vietnamese representatives of each coin. But more than one news report confirmed that certain Modern Tech employees were in fact linked to the Ponzi scheme, so Modern Tech is by no means innocent in the slightest.
To the surprise of many, the news came out that Modern Tech’s offices were empty on the day of the demonstration. They had sneakily moved out and liquidated one month prior (sometime in March). The news was reported by the office building’s owner after he realised that Modern Tech were involved in a scandal. It is uncertain where Modern Tech are based now and if they even still exist. All that remains of them is the Modern Tech website which is still intact.
But this scam should come as no surprise. Pincoin was subject to much criticism and online scrutinity with many crypto experts pointing out the ICOs possible flaws. Pincoin’s promises were too good to be true, promising returns of up to 40% for token buyers within the first month and every month after that- highly typical of a Rate of Interest Ponzi scheme. Ifan was ‘clickbaity’ by nature as it promised to provide an exclusive bridge between high-end celebrities and their loyal fans, a highly unlikely possibility that is obviously preying on the more gullible section of the population.
Vietnam’s government has never really been a big advocate for cryptocurrencies and has deemed them as an unlawful payment method. The office of the Vietnamese prime minister produced a directive on Wednesday that introduced methods of clamping down on illegal and dodgy ICO activities.