Fake ICO Generator Highlights the Real Threat of Scams
ICO Scams are a real threat
Recently, Jordan Belfort, who was a stockbroker that spent two years in jail for financial scams, discussed ICOs. He said that they were the biggest scam he had ever seen. He also added that most of them would blow up in people’s faces, but it would be too late by then. This is the reason that Chain Cattle was set up; to raise awareness of such scams.
He added that the ICOs being used to raise money for startups were much worse than anything he had ever done. His main fear was how different ICOs were from normal IPOs. For one, in an IPO, those who invested would gain shares and they could share the profits later. However, he noted that in an ICO, there was no system in place to distribute profits.
Additionally, he noted that ICOs were not subject to the same regulation as IPOs. He also added that there were those who believed cryptocurrencies were a scam in themselves. In fact, there were those who thought that the whole thing was a bubble, which would eventually pop.
Where Are ICOs Banned?
While cryptocurrencies are not illegal in China, the government has already banned ICOs. One of the reasons why China took this measure was that ICOs had spiralled out of control. In 2017 alone, they have raised more than a billion dollars. Besides that, most of the ICOs out there have ambiguous goals.
The other reason why China banned ICOs is that most of them have proven to be pump-and-dump scams. Investors set up a flashy website and establish a complex goal that no one can understand. They use the fancy website to confuse investors, who throw millions of dollars at them. Eventually, they just vanish with investors’ money.
What Chain Cattle Is Doing About it
One organization is creatively fighting against scam ICOs. Chain Cattle allows anyone to start up his or her own ICO. The site even has photos and a great design.
Although the text on the site may not be a lot of fun, they want to demonstrate just how easy it can be to set up a scam. As a result, they hope to help others avoid losing their money to pump-and-dump scams that have saturated the market. To keep their website running so that more people can understand the problem, they need donations. You can donate to them via Metamask or through an Ethereum address. You can deposit cryptocoins here to help them get on with their work.
While some wonder why regulators cannot stop these scams, the truth is that it would be quite difficult to do so. One of the reasons is that there is no legislation outlawing anyone from setting up a website. Besides that, cryptocoins are not recognized by most governments, which makes it hard to regulate them.
Image Credit: Depositphotos
Do you think Chain Cattle will succeed in raising awareness of ICO scams? Leave a comment below.