ICO Gone Bad: Confido Covers Up with Funds Just Day After ICO Ends
While all ICOs contain risk, the move of Confido is a flagrant example of an outright scam with zero interest in coming up with even a semblance of a software product.
A relatively small ICO gathering around $374,000 went dark and left investors holding the bag. Confido, a recently completed token event, has gone dark, with no intention of producing their idea and leaving users with valueless ERC-20 tokens.
The CFD token has lost more than 98% of its value since the launch, from a peak of around $1.20 to just $0.02. Before disappearing, the token had one final pump and dump on EtherDelta, the decentralized exchange that immediately lists new Ethereum-based tokens.
The team shared it had a legal issue, and went dark on all social media. On Reddit, discussions center around the project's red flags, including possibly faked photos. No one is certain if the legal issue is real or a made-up excuse:
#confido, only cheap #ICO placed & sold 2017 with $375.000 under serious trouble. pic.twitter.com/yTIkU7qMpI
— Mikael Koskela (@Maxknew) November 19, 2017
Even after regulators moved in to restrict ICOs in some regions, the campaigns are going on as strong as ever, increasing the total funds raised in 2017 to as much as $3 billion.
The Confido ICO may be a case where some of the first steps are made for a class action lawsuit. The reason for this is that the Ethereum gathered was sent to a Bitfinex account with enhanced user verification, and hence can be linked to a real person. For now, the community is looking for ways to enforce the handover of personal information.
ICOs are usually bought up with little critical oversight, and quite a few have solid processes and a promising team. And the world of cryptocurrencies has seen much bigger losses, such as the locking of nearly $300 million's worth in Ethereum on Parity wallets, as well as the recent hack abducting $30 million's worth of USDT tokens. But the flagrant disappearing act of the Confido team has angered users more as a premeditated scam.
Quite a few ICOs get sold off after the token event, but it is rare even for lesser tokens to wipe out 99% of their value.
Besides, the claims of Confido were honest and the idea was viable- an escrow service to track packages and release payment only on delivery. The Confido disappearance brings light to the general risk of ICOs, where even seemingly good projects may fail.
