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Cryptocurrency startup vanishes after raising $375K from investors

By Shawn Knight ยท 12 replies
Nov 21, 2017
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  1. Cryptocurrency enthusiasts across the web are adding Confido to their blacklist. That’s because the startup, which recently raised nearly $375,000 through an initial coin offering (ICO), has suddenly pulled a disappearing act that left investors empty-handed.

    As The Next Web highlights, Confido set out with the promise of creating a decentralized trustless payment solution for online shopping. Things went south, however, when the company recently informed investors that a legal issue was forcing them to halt development indefinitely.

    The company’s website was wiped shortly after, as was its presence on social media sites like Facebook and Twitter. Its value has since plummeted like a rock.

    After some digging around by Reddit sleuths, it appears as through Confido’s founder and staff profiles were all bogus. In other words, this was likely one giant ruse intended to swindle people out of money from the very beginning.

    This is hardly surprising news as cryptocurrency in general is ripe with fraud. Indeed, while Bitcoin and a few other virtual currencies have become quite profitable in recent years, the industry as a whole will need to overcome the negative stigma – and the very real dangers – that stories like this help foster.

    A recent survey of Bitcoin investors, for example, found that 44.15 percent of those polled said they routinely worry about the technological security of their investment. That’ll have to come way down for Bitcoin and other cryptocurrencies to have a shot at mainstream success.

    Permalink to story.

  2. Reehahs

    Reehahs TS Guru Posts: 704   +442

    The fraud committed here unintentionally reinforces the argument towards crypto-currencies as having a central authority was not effective in preventing fraud and mitigating investor's losses via recovery.
  3. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,066   +1,093

    There's just as much fraud in "real" currency - it's just a lot harder to prove and punish. The "good" part about crypto-currencies are that fraud is obvious as soon as it happens.... since the "money" only exists in a digital format, it's very obvious when it disappears, or finds itself somewhere it shouldn't be (like someone else's wallet).

    "real" money, on the other hand, requires mountains of paperwork to prove where it actually is... and it becomes easy for certain companies to add in some fine print somewhere that eventually trickles that money over to themselves....
    astralcyborg, Reehahs and H3llion like this.
  4. Cycloid Torus

    Cycloid Torus Stone age computing. Posts: 3,591   +963

    When they told me the basic unit was called a 'Crapshoot' based on thousands of cycles of a hamster wheel, I should have known better.
  5. ET3D

    ET3D TechSpot Paladin Posts: 1,549   +260

    No, there isn't. The percentage of fraud, embezzlement and just plain bad security is much much higher with cryptocurrency.
    Beerfloat, EEatGDL and psycros like this.
  6. J spot

    J spot TS Addict Posts: 199   +122

    The story is much worse than that. The investors are the lucky ones, if they didn't buy anymore after launch. The unlucky ones are the ones the devs dumped after the coin was pumped. They probably made a couple of millions. It's horrible.
  7. H3llion

    H3llion TechSpot Paladin Posts: 1,550   +353

    A startup vanished with investors money, nothing to see here. This happens a lot. Yes with Crypto its easier because stupid people.

    Cryptos are good if you do your research, you are basically crowdfunding a project in the hopes for it to pay off later. Just because it has Crypto name stamped on it, people tend to look down upon it.

    If you don't understand it, fear it! Amirite?
    Reehahs likes this.
  8. ET3D

    ET3D TechSpot Paladin Posts: 1,549   +260

    No it doesn't. I don't know where the cryptocurrency fans get their idea about how the rest of the world works. Sure, most startups lose the investor's money, but investors meet the people they give money to and they have a contract. If there's fraud, it can be persecuted.

    Yes, it's closer to crowdfunding, but again, people who post on Kickstarter are real people; they're verified. Sure they can try to defraud the system, but the site did add more protections over time. And sure, some people spend the money they get on Kickstarter unwisely, even (in rare cases) fraudulently, but backers can still follow up on that, because these are real people.

    With cryptocurrency there's much more need for trust, because there's nothing to fall back to, and that's a serious problem.
  9. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,066   +1,093

    I'd like to see some evidence of that.... I agree that the APPEARANCE of fraud is higher - but do you have real numbers?
  10. ET3D

    ET3D TechSpot Paladin Posts: 1,549   +260

    I don't think it's easy to get actual numbers, but I don't think the appearance is deceiving. Certainly at an anecdotal level this is true; I'm sure a lot of people active in the scene for a while have lost coins to embezzlement or theft; I certainly have. It's also clear that there's a lot more opportunity to mishandle funds, due to lack of any controls or regulation, and thanks to anonymity.

    I'd say that in general, if you go to a neighbourhood where you see everything is filthy and there are bodies in the street, and another that's clean and good looking, that doesn't guarantee that the clean one is safer, but it's certainly a good indication.
  11. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,066   +1,093

    So to sum up, you have NO evidence....

    Here's an interesting link... http://www.quatloos.com/forex-foreign-currency.htm

    This refers to a "new" law, the "Commodity Futures Modernization Act of 2000," which obviously pre-dates any digital currencies....

    Note any similarities with the practices with digital currencies happening now?

    As long as there are people, there will be scammers attempting to rob others - or trick them, etc - for their own personal gain.

    Don't blame digital currency - blame human nature.
  12. ET3D

    ET3D TechSpot Paladin Posts: 1,549   +260

    No. I have anecdotal evidence, which is not at all similar to 'no evidence'.

    I think your link is very telling. It's about options trading, and that may indeed be closer to cryptocurrency. The problem is that cryptocurrency pretends to be currency, and that's why it's more dangerous. If it was called 'crypto-very-high-risk-commodity' then people would have had a good idea of what to compare it to. Compared to everyday use of money, it's very high risk. It might at some levels be equivalent to fraud levels of other types of stock market trading, but at other levels it's higher risk, because the stock exchanges themselves are typically trustworthy (even if the traders and companies may not be), something which can't be said of cryptocurrency exchanges.
  13. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,066   +1,093

    But the risk is not inherent in the "currency"... it's over the regulations - which only don't exist because of the newness of digital currency.

    What is currency? It is simply something that people BELIEVE is worth something.... if enough people believe it, it is true. "Real" money has no more inherent worth than what it can be traded for.

    People will always be guilty of fraud, when they attempt to deceive people about goods and services - but don't blame the currency... Since the beginning of time, people have been defrauding others - there is no evidence to suggest that more of this is occurring with digital currencies.... As the vast majority of currency transactions still occur using "real" money, the vast majority of fraud still occurs there... Until I see any evidence to the contrary, I would hazard a guess that the % of fraud is no different using any currency - USD, CAD, Euros, Digital, etc...

    The ADVANTAGE of digital currencies are that there will always be a trail of exactly how much there was - something that can not be said about cash transactions (especially the old "wire me XX dollars through Western Union").

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