A Vietnamese company, Modern Tech conned 32,000 people out of $660 million by holding fake Initial Coin Offerings ICO.
The company first ran an ICO for its digital token, Pincoin while promising investors a constant return of 48 percent per month. The Ponzi scheme raised approximately $660 million from some 32,000 investors. Modern Tech then launched another token called iFan, a social network token for celebrities. Initially, Pincoin investors were paid in fiat for their investment and everything was going fine until January, when the company started rewarding investors in iFan, that wasn’t even redeemable for cash.
After giving out a few iFan tokens, the company just disappeared into thin air.
Scammed investors massed outside Modern Tech’s office in Ho Chi Minh, while the team of seven Vietnamese nationalists behind the scheme secretly left the country.
The local news outlet, Tuoi Tre reported:
“In fact, the real mastermind behind these projects is a team of seven Vietnamese nationals, who have held different conferences in Hanoi, Ho Chi Minh City and even remote areas to lure investors.
Investors have been told that they would enjoy a profit rate of 48 percent a month from their initial investment, and recoup all investments after four months. People would also be rewarded with an eight percent commission for every new member they have introduced to the network.”
To gather more and more investors, bonuses were rewarded to people who brought other investors to the program.
The seven people behind Modern tech known as the “masterminds” have headed to an unknown location leaving behind just a well-made website of the Pincoin project. According to the website their mission was “about building an online collaborative consumption platform for global community, base on principles of Sharing Economy, Blockchain Technology, and Crypto Currency” –
Though the website reads some traditional ICO related details however, it does not contain any information regarding the founders and advisors of the project. Even the whitepaper provided by the company had no mention of any founder. The fancy website was just created to present the ICO as a legitimate one and persuade more investors into it.
Viet Bao, the owner of the building that housed Modern Tech said:
“To formalize the mode of operation, ifan and Pincoin authorized their company as legal representative in Vietnam with tax code 0314707223. Modern Tech then held the event in Ho Chi Minh City Minh and Hanoi to raise capital from investors.”
Viet Bao further reported that Modern Tech “already left and annulled its contract” in March. “No one knows where they are moving now.”
Well this is another case of ICO fraud and it is probably the largest one in recent memory. The unregulated ICO market is the easiest way for scammers to fool naïve investors and make money overnight. There is no guarantee that no such faux ICOs will be held in coming days therefore investors should take precautions while investing their funds in such schemes.