Investors Have Placed $1 Billion in Cryptocurrency Offerings Rampant With Red Flags For Fraud (cnbc.com)

Investors have sent $1 billion into digital coin projects that flash warning signs for fraud, The Wall Street Journal reported Thursday. The revelation comes a day after the SEC created its own fake ICO to teach investors a lesson. From a report: In a review of 1,450 digital coin offerings, the Journal said it found 271 bore red flags such as plagiarized documents or fake executive information. Investors have already claimed losses of up to $273 million in these projects, the newspaper said, according to lawsuits and regulatory actions. The coin sales, or "initial coin offerings," give investors the chance to buy into a new digital token while letting developers get easy access to funding. The process may be a little too easy for many projects that are unproven or outright scams.

Coin offerings have raised roughly $9.8 billion in the two years through mid-March, according to financial research firm Autonomous Next. The Journal found widespread plagiarism in 111 projects' online whitepapers, including word-for-word copies of marketing plans and technical features.

Comments

Re:"As seen on TV"

[HornWumpus]

The best was the Obama inauguration commemorative coins. Four for $30.

They were nickels with stickers attached.

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

Re:"As seen on TV"

[tlhIngan]

More and more all these various 'cryptocurrencies' are starting to remind me of the 'limited edition gold coins' and 'collectible coins' sold on the x.2 and x.3 (and so on) broadcast TV channels. They're not really worth more than the metal they're made out of but they try to convince you they're going to be worth orders of magnitude more than you're paying for them.

Actually, a lot of them are real. Just you can buy them from the Fed for about 1/5th the cost normally. They are only "collectible" in the sense someone paid a lot of money to make an ad for them thinking you can only get it from them. But your local bank should be able to order in a roll for you for basically face value (they may be gold coins, but the gold content is nowhere near their face value). So the ad might sell you a roll of 20 $1 gold coins for $100 as "collectible" (they are limited - once the feds stop pressing, they're no more). Or you bank can get them for $20 or so.

Of course, it also plays on the "limited" part and "collectible" part. Just because something is limited, rare, or collectible, doesn't make it valuable. After all, the Fed just prints a new coin the next year and the scam repeats again.