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LoopX Startup Pulls ICO Exit Scam and Disappears with $4.5 Million (bleepingcomputer.com)
Catalin Cimpanu, writing for BleepingComputer: A cryptocurrency startup named LoopX has pulled an exit scam after collecting around $4.5 million from users during an ICO (Initial Coin Offering) held in the recent weeks. The LoopX team disappeared out of the blue at the start of the week when it took down its website and deleted its Facebook, Telegram, and YouTube channels without any explanation. People who invested in the startup are now tracking funds move from account to account in a BitcoinTalk forum thread, and banding together in the hopes of filing a class action lawsuit.
Here's the link to the BitcoinTalk forum our useless editors failed to provide:
https://bitcointalk.org/index.php?topic=2521307.0
I have to admit: it IS pretty funny!
Every single ICO is a scam. You're investing money into a a shitty alt coin or a shitty fake coin running on a shitty alt coin (Ethereum), with the promise that you can take the shitty alt coin or shitty fake coin and resell it to some other investor later down the line, exchange it for a decent coin, and then exchange it for regular currency.
There's not even the pretense of investing in an actual platform or currency, you're investing on a do-nothing proxy built on top of one, and you're subject to the dangers of both.
If the person running the ICO bolts, you're screwed.
If the person running the ICO somehow isn't an outright scammer, but nonetheless fails to get their honest attempt at a project off the ground and into profitability, you're screwed.
If the crypto currency the ICO is pegged to declines in value, the ICO itself has just declined in value (they keep their coins in the blockchain as a sign of good faith to potential investors - until they abscond / quit).
If the crypto currency the ICO is pegged to increases in value, you've lost out on that increase since you traded one type of coin for a proxy running on top of it.
If the ICO's coin never gets picked up by a major exchange, you won't every be able to profit from it even if you're way up on paper.
If the ICO's coin or the crypto currency the ICO is pegged to get banned by governments, exchanges, or payment processors, you're screwed.
They're too busy shooting black and brown people to care about this petty crime.
I was reading the forum, and just couldn't stop giggling at the acronyms that probably should have sent red flags everywhere. Coin Type: Proof of Stake (PoS) - Yeah, everyone now knows it was a PoS. Coin Abbreviation: LPX (also Louisiana Pacific stock exchange ID) - Yeah, everyone got railroaded. And their "proofen concept" definitely proved they had what it takes. Or they now have what they took. Schmucks.
Given my experience, local police would throw their hands up in the air and say they couldn't do anything. I had my identity stolen and a credit card opened in my name. The police outright told me they didn't want to investigate because they'd likely track the criminal to another jurisdiction and some other department would get the arrest. I pushed and they did some investigations. They reached a "dead end" when they showed me the online credit card application the criminal filled out. I pointed out that they had the person's IP address and the date/time it was submitted. The officer looked at me blankly as I explained that you could use those to find the ISP and get the name of the person who owned that account. Sure, it might be a hacked system, but it would be something. Despite this, though, they didn't follow up on this and I eventually stopped pestering the police for updates. For all I know, the people who stole my identity are still doing it to other people.
I tried contacting the FBI but since I didn't lose a ton of money, they weren't interested in my case at all. Maybe this would rise to their level and they could track these scammers down. Local police, though, would be all but useless.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
...pyramid schemes are based on network marketing, where each part of the pyramid takes a piece of the pie / benefits, forwarding the money to the top of the pyramid. They fail simply because there aren't sufficient people. Ponzi schemes, on the other hand, are based on the principle of "Robbing Peter to pay Paul"—early investors are paid their returns through the proceeds of investments by later investors
This was neither a pyramid, nor a ponzi scheme. It was just plain fraud.
WTB [sig], PST!!!