ICOs are quite a trend lately. The fundraising method is attracting a lot of new investors because of high short-term returns, what people don't understand are the risks. And as it is unregulated, it is a favourite of fraudsters.
One of the biggest ICO scams was orchestrated by the organisers of the popular ICO- Benebit, they have gotten away with millions scammed from investors. Estimations show the figure between $2.7 million to $4 million.
The Benebit ICO was all over the news – it was one the top-rated ICOs by multiple ICO review websites before the news of the scam came out. The operation was going well until someone spotted the photographs of the Benebit team were stolen from a British boys’ school website.
All the updates show that it was well orchestrated from the beginning. Benebits team always seemed to be active on social media over the year. They had over 9000 followers on its Telegram channel. 500,000 were spent on market promotion.
Benebit is a ghost on the internet now. The Benebit official website was shut down, along with all their other social media accounts. But their Telegram channel is still active, as hired moderators were responsible for updating the channel.
The affected investors are now taking their outrage on Telegram. An investor is claiming that he had invested 14 BTC and another 300 ETH. The channel is now flooded with memes.
The pre-sale event was promoted by ICO Syndicate, a famous name in the ICO market, and now the investors are angry at that organization. The passport details of the members of Benebit turned out to be fake which were taken by the third-party promoters for verification.
The SEC and multiple market regulators have issued warnings about the risks in ICOs. And though the returns are attractive, people should check the background of a business and the team behind it before investing. DYOR.