The recent distasteful PR stunt pulled by Savedroid founder and CEO Yassin Hankar has put extra pressure on initial coin offerings (ICOs), which are already suffering a reputational blow after several high-profile scams.
However, Korea M&A Center aims to reverse the negative perception of ICOs and bring credibility back into the sector through a new financial model. It will minimize investment risks by placing cryptocurrency investments in escrow and depositing them in banks after the required conditions are met.
The solution, ESC LOCK, seeks to restore confidence in ICOs by removing the fear of scams.
“As Ethereum (ETH) is predominantly used for ICO investments, the Korea M&A Center will immediately convert the invested ETH into cash and deposit it into a bank escrow account to eliminate the risks and damages of price fluctuation. This structure allows investors to receive a return on the amount of ETH invested even if the ICO fails or the price drops after listing.”
Korea M&A added that its new model makes it “possible to stabilize prices by distributing the amount of cryptocurrency open to the market after being listed, and to immediately raise additional funds when successful development or business is completed.”
Biggest ICO scam
The move by the Korean company comes after the biggest ICO scam to date was discovered in Vietnam last month. It involved Modern Tech’s iFan and Pincoin and amounted to a staggering $658 million. Vietnamese Deputy Prime Minister Vuong Dinh Hue has instructed at least six ministers to conduct a thorough investigation into the matter to “quickly consider and tackle” the massive scam.
Modern Tech is suspected of enticing thousands of investors to purchase iFan and Pincoin tokens by promising them huge monthly returns plus bonuses if they recruit others to invest. The company required of its clients to invest an initial $1,000 for coin purchases to qualify as an investor.
Scammers, criminals stole $670M in cryptocurrencies in 2018
Independent data collected by decentralized token investment management community Crypto Aware showed that scammers and cybercriminals had stolen nearly $670 million worth of cryptocurrencies so far this year, with “2018 on track to set a record as the worst year for the digital currency space in terms of assets lost.”
It should be noted that Crypto Aware collected the data before the discovery of the Modern Tech ICO fraud, which places the amount of money lost to ICO scams and other criminal activities at over $1.3 billion.