Fake initial coin offerings (ICOs) have managed to raise more than $1 billion, a new report from the Wall Street Journal has claimed.
The number of suspect ICOs was estimated at 271 out of the 1,450 tokens analysed for the study, with red flags such as plagiarised documents, fake team listings or false claims found upon inspection.
As with many lucrative tech trends, cryptocurrency has been seized upon by bad actors since it rose to widespread popularity. This has led to many organisations controversially banning ads for ICOs in order to protect users from potential scams.
Despite sometimes obvious warning signs, investors have funnelled more than $1 billion into these fake offerings, and only $273 million has been claimed through lawsuits.
Last month, after Scam Detector uncovered the seemingly false Bunny Token, the staff page was stripped of all but three employees.
And even more outlandish case was Savedroid’s, which was claimed as a PR stunt after the company’s CEO went missing after raising $50 million in funding. Soon after, Yassin Hankir posted a picture of himself chilling on a beach – a trip seemingly funded by the ICO.
Hankir later claimed that the scheme was an effort to improve standards in the sector.