The largest scams and failures on cryptocurrency market

Thousands of projects burst like bubbles

Only 10% of the projects that launch ICO sustain before they turn into the full-fledged business. Ter addition, many of the projects that attempted to develop blockchain-based systems without raising funds via initial coin suggesting failed spil well.

“Now, there are thousands of such (failed) projects. Fairly often, blockchain is used where it is not necessary. For example, having a distributed ledger is very expensive for a single canap or organization,” comments Nikolai Ermakov, co-founder of the Nakamoto Capital cryptocurrency fund.

Ter other words, it makes no sense to make any blockchain-based IT projects for a single organization, if there are already systems capable of solving the problem no worse than blockchain. Or if the development of systems based on a distributed ledger is unreasonably expensive.

One of the failed projects of implementing blockchain te the Russian banking sector, wasgoed Sberbank’s attempt to create a system of cross-border transfers. The idea of ??the project wasgoed that a user ter Russia buys tokens for rubles, and upon arrival te another country, thesis tokens could be sold for dollars. The objective is to eliminate the transaction costs associated with the transfer of currency across the border. However, the legislation does not yet permit the implementation of this project.

Mistrust of the US authorities to the crypto sector led to the closure of one of the largest and oldest crypto exchanges BTC-E, which made a big fuss and became a cause of concerns to investors. Te addition, the collapse of the exchange wasgoed accompanied by arrests, seizures and scandals. A few months ago the exchange reopened spil Wex.nz.

Fatal errors and gooey fingers of scammers

The accomplish collapse of crypto projects sometimes is caused not only by the intervention of regulator, but also by mistakes made by project’s team, especially ter terms of security. One of the striking examples is the failure of The DAO. The error ter the code made the system vulnerable and led to the theft of $60 million and buried the project that wasgoed once considered successful.

Another high-profile case te the cryptosphere affected ethereum-based crypto wallet Parity. It suffered an attack that resulted ter more than $156 million te digital currency being frozen and inaccessible.

One of the largest projects that successfully held ICO, but failed to commence, wasgoed a startup called Tezos. The project is among the leaders ter terms of the amount of funds raised. Investors appreciated the idea of ??this startup, whose team planned to create “ethereum killer”, and invested ter the project more than $232 million. However, the project’s successes have come to an end at that stage. The launch of the verhoging wasgoed permanently postponed, the community became aware of the internal conflicts within the team. Te this regard, several investors have already sued. It is hoped that this is just a team’s difficulty te organizing a business, not just another scam.

Scams

Among the projects launching ICO, there are very often those which intentionally attempt to be unsuccessful: to raise money, and then tell investors that they failed to develop the project.

Declouds team can be awarded for its over-insolence among those knowingly unsuccessful projects. It promised its investors to waterput about 295 BTC (more than $ 1million at the time of the ICO) raised via ICO te creating a cloud service for the purchase and sale of precious metals. The owners of the project not only created fake pages te the social networks, but they announced cooperation with one of the European banks. To make it more wooing, they “photoshopped” one of the project owners to the photo demonstrating presentation of the bankgebouw’s management at one of the conferences.

Such projects spil Opair (raised $1 million via ICO) and Confido (raised $374 thousand), which liquidated all their websites, pages te social networks and disappeared with investors’ money after having successfully placed their tokens.

Klimentii Tselovalnikov, co-founder of the multi-currency crypto market CoinPlace comments: “Basically, among scams are often petite projects, that is, within 300-500-800 thousand dollars. There is such an expression spil a light-scum, that is, when the project is working, but very badly, and this can be explained by anything: both by poor management, and by the fact that they have withdrawn too much money from the project. Another factor is the switches ter the market itself. They can be too quick, and the project loses its relevance after a while.”

Most likely, ter the future many projects will fail, and investors will lose their money they waterput te scams. However, spil the cryptosphere develops, the market will become more civilized. The most significant thing is that representatives of the crypto industry should draw conclusions from their failures and learn not only from their own, but also from other people’s mistakes.

Related movie: Bitcoin Preis explodiert �� | Litecoin, TenX, Ledger – Krypto News 12.04.2018


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