Recent ICO Scams and The People Behind Them

Initial coin offerings or ICO’s have been all the rage recently in the cryptocurrency world. ICOs enable companies to raise money by issuing cryptocurrency tokens that users can buy and trade at a later date on the cryptocurrency exchanges.

Basically, an ICO works just like an IPO – but rather than sell shares, companies use tokens with a promise from other companies to buy the tokens back when the product becomes successful and the value of the tokens increase.

Sounds like simple business sense right? Unfortunately, ICO scams like Cryptojacking, ransomware and ICO exit scams have become very popular in recent times tainting the industry and hurting many investors.

“4 out of 5 ICOs that took place in the last one year were ICO scams”


Recent ICO Scams and The People Behind Them!

Only 8% of ICO tokens end up in the exchanges revealed a recent research carried out by an ICO advisory firm called Satis Group. The result of this research is not good news for many investors…

  • 80% of ICOs are scams.
  • 8% ICO tokens end up in the exchanges.
  • 10% ICO funds are lost or stolen by cyber attacks.
  • 5% were dead deals.
  • 6% were classified as failed coins.

Some of these scams were made successful because of hackers, ransomware and even celebrities. Yes, celebrities!

Centra Tech ICO and Celebrity Endorsements – $32 million loss

Central tech was an ICO that paid for endorsements from prominent celebrities like DJ Khaled and Floyd Mayweather. In the first place, who takes ICO investment advice from a celebrity? Apparently, a lot of people trusted the face of these superstars and Centra Tech took advantage of this.

The company was incorporated in Delaware with headquarters in Miami Beach Florida by co-founders Robert Farkas and Sohrab “Sam” Sharma. They offered blockchain products like prepaid cards and wallet to store digital assets.

From July of 2017, $32 million was raised by selling Centra tokens called CTR tokens. These tokens were unregistered and the company went a step further to claim that it had an existing collaboration with Visa and Mastercard.

Centra Tech massively promoted the CTR tokens by making what is now known as “material misstatements” which deceived investors.

Unfortunately, the Centra ICO was illegal with no actual registration made with the commission so when the crackdown came, it came hard.

On April 2nd, 2018, the Centra ICO was flagged as fraudulent by the United States Securities and Exchange Commission (SEC). The founders were arrested for breaking federal laws and both men will be forced to return the ill-gotten gains including interest.

Steven Seagal is another celebrity that was caught in the crossfire of promoting an ICO that didn’t pan out. He publicly endorsed a cryptocurrency startup called “Bitcoiin”. Don’t confuse that with our beloved Bitcoin.

Seagal is the worldwide brand ambassador for the brand and took to his social handles to promote the product as well as keep fans updated on the progress of the ICO. However, on March 7th The New Jersey Bureau of Securities issued a cease-and-desist order to Bitcoiin ICO citing its unregistered securities.

The lesson to learn here is that celebrities and cryptocurrency do not mix. There are other ICO scams in recent times that are worth mentioning. Like the Pincoin token in Vietnam which was not endorsed by a celebrity but took the form of an ICO exit scam.


PINCOIN tokens – $660 million loss

Modern Tech is a Vietnamese cryptocurrency company that launched an ICO for their Pincoin token and raised $660m from about 32,000 people.

When the company first launched its token, they promised constant returns to investors. Afterward, they launched another token called iFan. The second token was meant for celebrities and was viewed as a social networking token.

At first, investors received cash until January 2018 when the company started paying out iFan tokens as rewards.

In no time, the people behind Pincoin disappeared like smoke. The team of 7 Vietnamese went from zero to multi-millionaires in a few months.

Savedroid “Over and out” – $50 million loss

Another recent ICO scam is Savedroid. It is owned by a German company that raised $50 million from direct funding and ICO.

The founder is known as Dr. Yassin Hankir who ended this ICO scam with a tweet saying “over and out”.

Savedroid came on the cryptocurrency scene with a unique perspective. Hankir and his team promised to use artificial intelligence to manage users investments and promised a crypto-backed credit card.

Savedroid ran smoothly for a few months and even had the appearance of legitimacy. The team opened an office and appeared in several events. However, their Twitter feed seemed to be constantly asking for investments. They wanted investors to participate in a #Airdrop program, unfortunately, some people fell for the scam. Despite all the warning signs, investors lost a lot of money.

Scam ICO Developers And Launching Services

Along the same lines as scam ICO’s, there have been documented complaints and investigations regarding ICO developers and launching services. Most of the scam ICO developers and launching services seem to be coming out of Sofia, Bulgaria.

Just before an ICO is about to go live, these scam launching services lock their clients out of their own backend, and try to extort money from them, or threaten them that their ICO won’t get launched. At this point if the client doesn’t pay the extortion, they lose everything!

TokenGet an ICO launching service out of Sofia Bulgaria, is under investigation for these exact allegations. The TokenGet Launching service was developed by BlockchainMob. The CEO of TokenGet and BlockchainMob Viktor Petrov, is also under investigation for threatening Mobilink-Coin with the same tactics as described above.

What Are The Newest Crackdowns on ICO Scams?

Regulatory bodies are beginning to take more notice of cryptocurrency scams and even though it is an unregulated industry, certain guidelines are being put in place to ensure that investors and crypto-enthusiasts are safe.

The Security Exchange Commission (SEC) has been involved in many recent crackdowns and issued cease and desist notices to suspected ICO fraud companies. This has come as a shock to many who believe that they don’t have the jurisdiction but let’s not forget that all ICOs are security offerings placing them under the purview of SEC.

Last month, SEC issued a large number of subpoenas to ICO issuers and gatekeepers who may be involved in transactions that do not comply with the federal securities laws.

What this means for past ICOs is simple: Fix the problem before the SEC finds you. Companies that have traded tokens to unaccredited investors or broken any securities law violations need to take action now.


ICOs are one of the easiest investments to make that is why many people want to be a part of it. However, not everyone understands the risks involved in ICO investment so before you plunge in to take up an ICO offer make sure to do your background investigation.

Find out who’s behind the company and the background of the offer. To avoid ICO scams, remember that all cryptocurrencies are risky and even though they offer huge returns in a short time, they also come with risks for investors.

Cryptocurrency & ICO Scams

Cryptocurrency and Initial Coin Offerings (ICOs) have become very popular investment opportunities for investors who want to make huge profits while investing in disruptive ideas by start-ups offering Blockchain-based products and services. According to, over $4.5 billion has been invested in ICOs in the last 4 months.

ICOs present an innovative financing option that circumvents the traditional, highly-regulated funding process. Further, most investors do not fully understand the nascent blockchain technology. These two factors have provided a fertile ground for fraudulent scammers to thrive.

Crypto scams can be executed through hacks, thefts, Ponzi schemes, and Exit scams. In this article, we shall look at some of the exit scams that have been witnessed in the history of cryptocurrencies.

An exit scam refers to the deliberate and preplanned theft of investor funds. This happens whenever scammers collect funds from investors without the intentions of delivering the project. The scammers hype their ICOs in the market place, collect funds from unwitting investors, then disappear soon thereafter.


LoopX is the latest exit scam and was to be launched in February 2018. It promised to deliver a proprietary cryptocurrency trading platform. The team behind the scam claimed to have successfully developed and tested an algorithm that would enable
investors to make more money online and the payments would be made on a weekly basis.

The ICO whitepaper promised software that would have the capacity to process over  10,000 trades over 100 currencies per second ensuring enhanced profitability. At the end of the five separate token sales, the startup had pocked over $4.5 Million,deleted their website and social media profiles, and disappeared without a trace.


PlexCoin promised an unrealistic return of 1,354% within one month. It was shrouded in mystery. The start-up behind the ICO advertised a non-existent development team, obscured the past financial crimes of its founder, Dominic Lacroix, and their whitepaper was not available until after the pre-purchase period was over.

The ICO was stopped by the US Securities and Exchange Commission (SEC) following official complaints about its founder. By the time this intervention by SEC, the startup had collected over $15 from unsuspecting investors.


Benebit promised a novel blockchain technology to create a token for customer loyalty programs. The ICO was one the most hyped ever in the history of ICOs with an excellent PR team and heavy presence in the social media. For over one year, its Telegram channel had gained over 9000 followers. It was top-rated by multiple ICO review websites.

Two months to the launch date, the details of the development team turned out to be fake. It was discovered that they had used fake passports as proof of identity and the images had been stolen from a British boys’ school website. Soon thereafter, the ICO website and social media channels were closed leaving the investors counting their losses. ICO analysts estimate that between $2.7 million and $4 million was lost in the scam.

Opair and Ebitz and scams were two separate scams which were executed by the same person. Ebitz presented itself as a variance of Zcash with an enhanced algorithm and new features but without the founder’s rewards. This would guarantee better returns to the investors. On its part, opair promised a system of decentralized debit cards built by combining the best of Bitcoin and Ethereum networks.

The scam was unearthed when it was discovered that the founders had used fake LinkedIn profiles. Additionally, although they had provided details of the development team including their photos, they refused to attend events or go on video calls for “privacy reasons.

The scammers used the same server DNS records for the two websites. As expected, as soon as the details of the scam went public, the ICO websites were taken offline, and the team went silent. By this time, investors had lost a combined sum of $2.9 million.

REcoin and DRC


These were two separate exit scams which were executed by the same person¸ Maksim Zaslavskiy, who claimed to create the first ever cryptocurrencies that were backed up by real estate and diamonds. The two projects were presented as fully-fledged and staffed companies.

However, according to Securities and Exchange Commission (SEC), the two schemes had no real operations. They had exaggerated their scale of investment and no investments were made on behalf of the investors. To make matters worse, SEC declared that REcoin and DRC were not ICOs but rather securities sales. In total investors lost $300,000.

Blocksims ICO

This is an ICO that was launched by a guy by the name of Shehar Yar. He stole data from a legitimate ICO, and tried to pass it off as his own. Like some of the other scams detailed in this article, Blocksims also created fake profiles on Linkedin for their founder, and fake team members.

Their fake profiles were easily discovered when it was found that one the photos they used for a supposed investor, was that of a Russian serial killer. Of course their scam failed miserably, but they are still out there trying to scam people.

Here is a full investigative report on the scam –


ICO exit scams are a reality and many investors have lost their hard-earned cash in these ventures. It is advisable that you carry out a thorough appraisal of the ICOs before investing. Additionally, consider consulting an expert for a professional due diligence.

Cryptocurrency Ads Being Banned By Social Media

Social bans Cryptocurrency ads

The ICO market has experienced phenomenal growth in the last 15 months. ICOs have opened up significant opportunities for startups by providing them with a simple way of raising funds compared to traditional venture capital. They offer a fast, low-cost option that does not require intermediaries. According to, close to $5Billion has been raised in 2018.

Due to its decentralized and open nature, the cryptocurrency world offers minimal protection to the players. Consequently, scammers and con artists have invaded the ICO market by introducing fake ICOs, wallet scams, email scams, and fake exchanges. Social media networks have a high number of users, making them natural grounds for the perpetuation of these frauds.

A prime example is the Blocksims ICO – Blocksims stole the business model, and database content from a legitimate ICO, and have tried to pass it off as their own. People who invest in Blocksims ICO will soon find out they have been swindled. There has been an aggressive effort to expose this fraud, but some people who don’t research and do their due diligence, will lose their money.

In the last 3 months, social media giants Facebook, Twitter, and Google have banned ads in their networks. Facebook set the pace on 30th January, 2018 when it updated its advertising policy to prohibit misleading or deceptive promotional practices. Cryptocurrency-related ads fell in this category and the company initiated a total ban on them.

The company explained that the ban was instituted with the aim of protecting the platform users from financial products which are not offered in good faith and to make it harder for scammers to profit from a presence in the social media network.

Furthermore, the blog post which announced the news indicated that the ban was intentionally broad and would be reviewed over time should the operating environment improve. In fact, in an interview with the CNN, Mark Zuckerberg, the Facebook co-founder, suggested that there was a need for some level of ads transparency regulation on the internet similar to what is applicable in TV or print advertisements.

Hot on the heels of the Facebook ban, Google announced, in a March 2018 post, a similar ban on its platform starting June 2018. The company has updated its financial services policy to exclude advertisements for cryptocurrencies and related content including ICOs, cryptocurrency exchanges, wallets, and trading advices. The change in policy impacts all Google Ads products meaning that cryptocurrency-related ads will not be available both on the search engine’s own websites and third-party sites in its network.

Scott Spencer, the Director of Sustainable Ads at Google told CNBC that the new restrictions on cryptocurrency Ads were necessary since they had observed significant loss or potentialloss to consumers and required to approach the sector with  extreme caution. The implication ofthis ban is that genuine cryptocurrency wallet providers and promising ICOs only about two months to access the world’s most popular search engine.

As if the bans by Facebook and Google were not bad enough, Twitter has joined in to complicate matters for the cryptocurrency dealers and ICOs offers. The policy, to be introduced over the month of April, will ban the advertising for Initial Coin Offerings and token sales. In addition, the Twitter ban will also include a ban on cryptocurrency wallets and exchanges, unless they are public companies which are listed in major stock exchanges. Just like its counterparts, Twitter cited the safety of users as the primary motivation behind the ban.

Coming after the bans by Facebook and Google, the ban by Twitter was not completely unexpected. In many occasions, Twitter has been used to impersonate popular cryptocurrency advocators and developers leading to huge losses by unsuspecting users. Furthermore, there have been incidences where Twitter accounts of popular industry personalities have been hacked and used to promote some nondescript tokens. That was the case with John McAfee’s twitter account.

Despite the bans, one common thing about these social media companies is that they have themselves, in one way or another, invested – or have some interests- in the cryptocurrencies and the underlying blockchain technology. Two weeks before the ban by Facebook, Zuckerberg in a detailed post focused on the potential benefits that cryptocurrencies have for companies like Facebook. He went on to explain how ready he was to study the benefits of these emergingtechnologies and apply their benefits to improve his company’s offerings.

On its part, Google has made substantial investments in companies which directly use cryptocurrencies. These include Blockchain-based cloud storage Storj, payment platform Veem, and London-based online wallet

As for Twitter, its CEO, Jack Dorsey, is a staunch advocate cryptocurrencies having personally invested in Bitcoin, is a CEO of a point-of-sale software startup which plans to incorporate Bitcoin buy/sell features, and has invested in Lighting Labs.

In the absence effective regulations on cryptocurrencies and ICOs, this latest trend of their restricted promotion on social media platforms is likely to continue. With the increasing number of ICOs coming to market, it is an impracticable task to differentiate genuine from frauds. Although such restrictive measures in Ads control are restrictive and hurts the genuine players in the cryptocurrency world, the impact of fraudulent activities is great. The platforms are seeking to produce a safer environment free of potential scams like Blocksims ICO

Beware Of ICO Scams


ICO, or initial coin offerings have been a hot commodity lately. Right before year’s end, Bitcoin, and blockchain technologies were the only thing you heard about; because of this, more companies are jumping into the online cryptocurrency market.

However, with this also comes the potential for fraud and scams on the web, and there are quite a few to watch out for. So much so that the SEC (securities exchange commission), and federal government agencies, are warning those who are considering to purchase these ICO offerings, to think twice, and do their research to avoid a scam. These are a few signs to watch out for to avoid getting caught up in a scam, or fraudulent ICO.

Guaranteed Profit Margin

No company will ever guarantee you will turn a profit. Whether it is in stocks & bonds, commodities, even purchasing something that carries virtually no risk, like a bank CD. If a company guarantees you are going to make profits, and makes outright claims of how much you can expect to earn, or guarantees there is no risk of loss, avoid them at all costs.


If there is no white paper research written, bad white paper copy, or plagiarized white paper, this is a serious sign that fraud is looming ahead. A whitepaper is the most important element of any initial coin offering (ICO); this presents the outlines, what it hopes to achieve, what you can expect, possible fluctuations, and so forth. It breaks down distribution models and potential earnings based on investment amounts. If an ICO doesn’t have a white paper, you can be rest assured it is a scam.

Online Presence

Poor online presence is a telltale sign of a scam or potential for fraud. If a company isn’t readily traded through ICO platforms, this is a problem. A team page is something a reputable ICO company will have; however, also look for LinkedIn pages, and ensure the CEO has their profile listed on the site. Do your fact-checking, compare companies, compare listing prices, and stay abreast of the different signs of fraud, to avoid losing your money in one.

Roadmaps (lacking or unrealistic)

Most ICOs will provide investors a roadmap of what they have achieved to date, where they plan on going, and plans for future growth. This is of high importance to you as an investor. It gives you an idea of how the ICO has performed to date, and what you can potentially expect, based on investments. Furthermore, if the roadmap simply tells you the ICO is being offered and has no future plans, you can determine if it is worth investing in.

Example Of a Fraudulent ICO

Blocksims ICO is attempting to launch a fraudulent ICO. They stole their fake business model from a legitimate company’s ICO. They have used fake profiles for their team members, and phony pictures they have stolen online. Blocksims scam ICO is easy to spot, because their have been several investigations, and their scam has been widely publicized. Just do a Google search for “Blocksims ICO Scam”. And see what you find.


There is always the possibility of fraud and scams in the market, especially with new ICOs. You should be familiar with signs of a scam, how they occur, and how to avoid them, before you think about investing in one. The more research you do, and the more time and effort you put into learning about what you are investing in, the easier it will be to avoid the scams like Blocksims.

Blocksims ICO Fraud

I published a post on February 11th regarding the use of false identities and the false images of the players of the Blocksims ICO. I want to give you an update. I called out Blocksims ICO for using the image of Janet Cowell for their bounty manager, Maxine.

Janet Cowell

Maxine Layare Blocksims

I called them out and I am sure Janet’s representatives called them out as well for fraudulently using her image. Now, Maxine has a new image that was pulled from a dating website.

Blocksims ICO maxine

maxine blocksims

You don’t have to be Sherlock Holmes to see the fraud. It just continues on and on.

I have investigated some of the largest scams in the world. Ponzi schemes. Money laundering by the Bank of New York. DoD fraud. Most of my adversaries were very intelligent. They knew how to work a scam. With that said, this Shehar Yar guy who is one of the top ICO scammers in the world is a real idiot. I am almost bored with him. There is no real challenge. I equate him with the schoolboy who steals a candy bar at a local grocer. And his delusions of grandeur, selling himself as a CEO when he lives behind his mom’s house with the goats as a $20 per hour dev hack amazes me.

As the original website developer for the very legit, who was fired for being a fraud last December, who has systematically tried to crap on the Mobilink-coin after stealing their business model, he has the balls to infiltrate the Mobilink-Coin Telegram group to stir up the pot under the handle of Abidhussain Syed.

Blocksims ICO

I tweaked the photo and there he is:

Shehar Yar Blocksims

Lastly, as I was monitoring the Blocksims Telegram room, I observed an individual asking if was going to be approved by the Securities and Exchange Commission in the United States and their answer was yes.

Blocksims ICO

This is a complete lie. I would know this because I am a US citizen who made contact with the SEC. Of course, based upon the deceitful practices of the principals of the Blocksims ICO, I already knew this, I reported Blocksims to the authorities, once again.

As I expand on this investigation and the authorities get closer to kicking in the doors of the fraudulent players, please feel free to communicate directly with me if you have additional information. All communication will be held in the strictest of confidence.


How To Tell If An ICO Is a Scam

ICOs have provided an avenue through which the general public can invest in Blockchain ventures. The popularity of ICOs in the world of start-ups has been driven by the availability of a wider pool of investors compared to the traditional venture capital process. Additionally, the organizations are able to raise capital without following the stringent regulatory requirements of an IPO. As popular as ICOs have become, they are fraught with scams.

According to, there were 886 Initial Coin Offerings(ICOs) in 2017 and these raised in excess of $6 Billion. This statistic provides evidence that the ICO phenomenon is no longer a peripheral strategy and has started to occupy a central position in the crypto-startup world. ICO refers to a mechanism through which start-ups offering Blockchain-based products and services are able to raise funds by tapping into the crowdfunding concept by selling investor tokens in exchange for capital.

Due to the fact that there is an extremely high number of ICOs at any given time and that Blockchain is still considered to be an early-stage technology, most investors do not have the capacity to conduct effective due diligence on all of them. Consequently, there have been cases where investors have lost money through ICOs which had been specifically designed to fund scams and to fleece investors.

The legal and regulatory framework providing the guidelines for the operations of ICOs has not grown in tandem with this nascent technology. However, lately, ICOs have received a lot of criticism and are under scrutiny from financial sector regulators in many countries. For example, in July 2017, the U.S. Securities and Exchange Commission (SEC) communicated that securities laws may apply to the sale of new cryptocurrency and in December same year, they got an asset freeze order to halt PlexCoin’s ICO.

As ICOs investors and regulators develop tools for due diligence, knowing which red flags to look out for in an ICO can go a long way in safeguarding your hard-earned digital coins. Below, we present 7 of these red flags.

1. Opacity of the people behind the ICO

One of the red flags in ICOs is the opacity of the team behind the project. For credible ICOs the developers should be able to publicly provide their credentials and previous experience in cryptocurrency. ICOs investors should carry out a thorough research on the background of the developers and establish their capacity to execute the project.
In the event that the developers are anonymous, it is advisable to avoid the ICOs altogether. Further, if the developers are not known in the cryptocurrency world or very little is known about them, you may consider reviewing their social media accounts or their contribution in the Blockchain forums such as BitcoinTalk.
An excellent example of opacity of developer is the Plexcoin ICO mentioned above. During this ICO, the operators concealed their identity yet one of them had violated securities laws in Canada and was flaunting a court order barring him from holding a securities offering.
When the list of developers includes some well-known names in cryptocurrency, it is advisable to confirm with them whether they are aware of the project. This would help to eliminate the possibility of imposters hiding behind popular names in the industry.
2. Suspicious claims

Perpetrators of fraud make unrealistic claims and promise impossible returns. These include promises for enticing financial gains as the coin prices skyrocket after the ICO is closed. This was the case with PlexCoin who promised over 1,300% returns in 29 days. Other ICO marketing materials or whitepapers may promise impossible solutions using very bold claims about their product while offering no evidence of any new disruptive ideas/features.
In addition, investors must understand that it is not every venture that needs the Blockchain technology and that not everything needs to be decentralized. Consequently, you should evaluate whether the Blockchain or native tokens are necessary for the proposed solution. If the answer is negative, then there is a high probability that the project is a scam or just another solution that does not add much value and thus is not worth investing in.
3. Empty repositories for open-source projects

One characteristic of many Blockchain projects is that they are open-sourced meaning that their code base is often uploaded to repositories like Github or Sourceforge. If a project has promised open-source code and yet its repositories in Github are either inexistent or empty, then this is a red flag for scammers.
For technical investors, always check the project code against other existing products. If the project is just a copy-and-paste of an existing product or just offers minimal modifications of existing code, it is advisable to keep off the ICO.
A perfect case of code theft is the battle between Mobilink Network and The brain behind Blocksims had been employed to do some work for Mobilink, but when he couldn’t deliver, he was fired. He later went out to implement Mobilink’s idea using stolen code.
4. Inadequate escrow controls
Escrow is a service or a wallet that acts as an intermediary between the investors and the ICO organizers. The escrow holds the investors’ funds and the vendors should only get the funds after they have delivered their end of the bargain, usually after reaching a milestone outlined in the whitepaper. The escrow service is designed to enhance transparency, security, and confidence of all the players in the ICO.
Where ICO organizers fail to subscribe to escrow services or where the key holders of the multisig wallet are compromised, then becomes a red flag for a potential scam.

5. Fake Photos

There is a strong temptation for scammers to create an impression of association/partnerships with reputable institutions or individuals. Despite the availability of software tools to detect this kind of fraud, the use of photoshopped images remains a popular way to create these fake connections. An example of such an ICO scam is Blocksims ICO.

They created fake profiles of investors raving about how great their ICO is. One of the things they missed was that one of the pictures was of a Russian serial killer named Aslan Gagiev, also known as Djako. So another good technique to use is to check their team members profile photos with online facial recognition software.

6. Excessive use of catchphrases

ICO scammers have a tendency to apply the excessive use of buzzwords in order to sound technical and sophisticated. This is nothing but a trick to enhance the quality of the text while confusing the investors. At the end of it all, such write-ups do not communicate anything sensible to the investors and therefore ICOs with their excessive use should be ignored.

7. Low-quality ICO Whitepaper/Website


An ICO whitepaper or website is supposed to communicate all the details about the project including the project roadmap, application of the funds, team members, technical details, developers’ stake in the project as compared to what is being offered to the public, among other details. When a whitepaper or website fails to communicate these details or is full of buzzwords, there is a high likelihood of possible fraud and you should keep off.

While there is no foolproof way to shield investors from ICO scam, the above points provide a realistic formula for vetting ICOs. However, as the markets mature and more financial regulators are drawn into the sector, the likelihood of fraudulent ICOs will diminish. Before then, ensure that you undertake a comprehensive review of the ICO before investing.