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An Ethereum Startup Just Vanished After People Invested $374K (vice.com)

Posted by BeauHD on from the gone-with-the-wind dept.

An anonymous reader quotes a report from Motherboard: A startup on the Ethereum platform vanished from the internet on Sunday after raising $374,000 USD from investors in an Initial Coin Offering (ICO) fundraiser. Confido is a startup that pitched itself as a blockchain-based app for making payments and tracking shipments. It sold digital tokens to investors over the Ethereum blockchain in an ICO that ran from November 6 to 8. During the token sale, Confido sold people bespoke digital tokens that represent their investment in exchange for ether, Ethereum's digital currency. But on Sunday, the company unceremoniously 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, citing legal problems that prevent the Confido team from continuing their work. The same message was also posted to Medium but quickly deleted.

"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." The message was apparently written by Confido's founder, one Joost van Doorn, who seems to have no internet presence besides a now-removed LinkedIn profile. Even the Confido representative on Reddit doesn't seem to know what's going on, though, posting hours after the initial message, "Look I have absolutely no idea what has happened here. The removal of all of our social media platforms and website has come as a complete surprise to me." Confido tokens had a market cap of $10 million last week, before the company disappeared, but now the tokens are worthless. And investors are crying foul.

22 of 190 comments (clear)

  1. Another ICO, another SCAM. by Kremmy · · Score: 5, Insightful

    This is the track record of the Initial Coin Offering. And people keep putting money into them.

    1. Re:Another ICO, another SCAM. by HornWumpus · · Score: 5, Insightful

      A fool and their money, were lucky to get together in the first place.

      It is an immoral act to let a sucker keep his money.

      Good for confido...Confido? They had 'confidence game' right in their name folks.

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
    2. Re:Another ICO, another SCAM. by Lab+Rat+Jason · · Score: 3, Funny

      I think "I've got a coinbase to sell you" will emerge as the new "I've got a bridge in brooklyn to sell you"

      --
      Which has more power: the hammer, or the anvil?
    3. Re:Another ICO, another SCAM. by Applehu+Akbar · · Score: 3, Interesting

      This is the track record of the Initial Coin Offering. And people keep putting money into them.

      Based on historical precedent, the third and largest collapse of a scammy ICO will be the pin that pops the cryptocurrency bubble.

    4. Re:Another ICO, another SCAM. by rtb61 · · Score: 4, Insightful

      Bitcoin is in for a hell of a ride. Big money vulture capitalist have statistically analysed there is sufficient real money around bitcoin to harvest by purposefully hugely fluctuating the price of bit coin. UP, down, UP, down, UP, down, always milking cash out of the fools in the cycle, it is going to be really cruel. They will keep riding bitcoin until the kill it, little money does not stand a chance against big money, in a ponzi play like bitcoin, it's price as has been demonstrated can be all too readily pumped or dumped.

      --
      Chaos - everything, everywhere, everywhen
    5. Re: Another ICO, another SCAM. by Applehu+Akbar · · Score: 2

      Isn't the limited money supply one of the features? posting AC because I modded people.

      Mathematically limited money supply was intended to make Bitcoin immune to inflation. This worked; since BTC was invented, the algorithm has never been cracked and the money supply has been asymptotically edging toward the limit of 21 million coins as new coin is mined.

      What the Bitcoiners failed to realize is that if you hold the supply of a money constant, it loses its value as a neutral medium of exchange because people perceive it as becoming more valuable with time. It gets hoarded, and this is what is happening with Bitcoin. When BYC first went on the air, coins were priced low and people rushed to buy things with them. Now people buy BTC only in hopes that they can sell it for more later.

      Real national currencies are managed by central banks whose job it is to keep the money supply growing at ideally the same rate at which the sum of all goods the currency can be traded for grows. Because currencies are political, there is a general tendency to print a little more each year than the value of goods has actually grown. This is called inflation, and so long as the percentage change each year stays small, people will use the currency to buy things with but are not motivated to hoard it.

      Look at the history of gold. Gold has always enjoyed value because the amount of it grows only very slowly with new mining and there is no low-value simulant that has the same density and was available in the times when gold was used as everyday money. In ancient and medieval times, gold could be used directly as money because the good it traded for had the same total value year after year. But as soon as the Enlightenment and the Industrial revolution started increasing the value of traded goods, those goods in trade drove gold out of circulation by making gold a hoarded commodity. Countries began printing fiat money for everyday transactions. Today gold holds its value and with monetary inflation increases in value relative to fiat monies - it is hoarded. Bitcoin is just an attempt to recreate gold as a digital medium.

  2. Scammed by mysidia · · Score: 2, Informative

    Sorry.... you weren't acting like investors if you bought ICO tokens that don't even represent legal shares of a business with so little information and so little in the way of business documentation and personal guarantees OR audited financials, and you should have been more careful.

    That's just a good ol' fashioned scam; let the ICO buyer beware.

  3. I got burned by 110010001000 · · Score: 5, Funny

    I invested in it and got burned. That hurts since i only make $50,000 in IT in Silicon Valley. I guess lesson learned - don't invest in startups that you don't know.

    1. Re:I got burned by mcmonkey · · Score: 2

      What research did you do into Confido before you "invested"? The main people involved, what successful businesses have they run in the past? What in their background led you to believe they would provide a return in this case?

      And ICOs in general, I've heard plenty about how much the folks running these ICOs are pulling in. What's the history on the people on the other end? What sort of return have "investors" had in the past?

    2. Re:I got burned by jeremyp · · Score: 2

      No. If you can't afford to lose the money, do not invest in start ups at all. Start ups are inherently very risky - even when they are not scams. Most of the time, you will lose your money.

      --
      All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
  4. Not learning? by duke_cheetah2003 · · Score: 3, Insightful

    People not learning that crypto currency is a frickin' scam. No sympathy.

    1. Re:Not learning? by Hognoxious · · Score: 2

      Shocked, shocked I am!

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  5. It's in the name! by santiago · · Score: 3, Insightful

    So, Confido was a Confidence Game? The name even means "I trust" in several Romance languages...

  6. Ha ha ha. by mcmonkey · · Score: 5, Insightful

    "The message was apparently written by Confido's founder, one Joost van Doorn, who seems to have no internet presence besides a now-removed LinkedIn profile."

    Founder of internet-based currency, has no internet presence to speak of. Yeah, "Joost van Doorn" doesn't exist.

    When people do so little due diligence or research, we can't really call it investing. People gave their money away. People can cry foul or whatever all they want. That money is gone.

    We're really getting into the territory where it is legitimate to ask, how did people so gullible acquire anything of value in the first place?

    1. Re:Ha ha ha. by Anonymous Coward · · Score: 2, Insightful

      Well, if you are a capable individual nothing is setup in your name to begin with, and the money goes off-shore and becomes untraceable through other means. The person they "catch" is the person whose name everything was setup under, the fall guy, and not you. I mean after all if you are so capable of conning people into shit then why not start with conning some dumb fuck to be the CEO of your little scam?

    2. Re:Ha ha ha. by Kjella · · Score: 2

      We're really getting into the territory where it is legitimate to ask, how did people so gullible acquire anything of value in the first place?

      They sucker in a few that are always looking to make lots of fast money through professional appearances and fancy business plans. Then you make those people pimp the system to their friends, that's what sells most people. A bunch of my friends got ripped off in some MLM scam some years back, it'd entered my clique of friends through one person who then became two, those two convinced a third and... the more friends are in on it, the harder it gets to say you're all wrong. Hell, even afterwards some simply tried to say it was just a risk investment and they lost.

      Humans are terrible at backing out of a bad idea when they've first committed to it, try watching newbies in poker that fall in love with their hand. Not betting a poor hand is easy. Betting a good hand that turns bad then fold, that's hard. It's why some projects run into ridiculous overruns, it's always 10-20% more to finish and those add up to double or triple the initial budget. It's how the Nigerian prince scams work, as long as people feel there's the small chance that those millions of dollars are right around the corner or over the next hilltop they'll put in a few more dollars and then a few more and then even more.

      --
      Live today, because you never know what tomorrow brings
    3. Re:Ha ha ha. by Computershack · · Score: 2

      Make no mistake, Mr. fake van Doorn is going to get caught. People that steal real money like this without connections and money behind them are doomed to get caught and go to jail. The SEC started the initial paperwork to start going after these ICO scammers and they don't' screw around, they ruin your life, send you to jail and then let the IRS have their way with you.

      That is assuming he is in the USA. If he isn't then the SEC and IRS can stamp their feet all they want and they can't do a damned thing about it.

      --
      I only please one person per day. Today is not your day. Tomorrow isn't looking good either. - Scott Adams
  7. Re:DIY Cryptocurrency Mining... by originalGMC · · Score: 2

    Climate change is real, the earth is heating up and dumbfucks sending a nuclear reactor worth of power for e-Monopoly money are the cause.

    I seriously lol'd at this. Just imagine a BTC farm being powered by a coal fired power plant ..... hah! They are the problem!
    Seriously though, if you spend $15000 on a mining rig, how much time / energy to mine 3 btc? Does the energy bill compare against running a heater to warm your house, as opposed to using the mining rig as the heater? Lastly, can I get one or two of your 1080ti cards you're wasting on monopoly money to run my games?

  8. Re:DIY Cryptocurrency Mining... by magarity · · Score: 2

    To heck with bitcoins; that rig will get me some serious SETI@Home points!

  9. Re:What did you expect with a name like that? by CanadianMacFan · · Score: 5, Funny

    They bought ether and then complain when it disappeared into thin air!

  10. Re:Oh no! by magarity · · Score: 2

    To qualify as a Ponzi scheme they would need to pay off at least one round of investors with capital from a second round.

  11. ICOs are scams by slashmydots · · Score: 2

    In the BTC community, we regard anyone who buys into ICOs as complete and utter morons.