The current cryptocurrency investments ecosystem is one of the purest forms of a free market in economic history. This gives rise to an incredible growth which makes some people overnight fortunes and allows startups to flourish like never before. Unfortunately, it also puts the burden on investors to vet the teams, ideas, and capabilities before getting involved with any ICO.
Exit Stage Right
The website for an ICO project called Prodeum has gone offline unannounced on Sunday, leaving only a nasty message to investors behind. Unlike in similar cases in the past, this time there was no attempt to claim the system was hacked, or pretend it is part of temporary maintenance and will be back in business shortly. The social media accounts of the project were just deleted, and it was as if it never existed to begin with. Investors were left to complain on social media with many calling it a premeditated exit scam.
According to its press release, Prodeum was supposedly a startup from Lithuania, which was “about to revolutionize the fruit and vegetable industry with the use of Ethereum blockchain technology.” It claimed to have already had discussions with the International Federation for Produce Standards (IFPS), and officially launched a crowdsale on January 20th. Plans were underway to begin trial runs in Lithuania and the U.S.
“It’s an idea whose time has come,” said at the time Prodeum product manager Rokas Vedluga. “We’re proud and excited to bring this remarkable new technology to the world!”
Lost of Red Flags, $5 Each
Considering that ICO teams can’t really be compelled to deliver everything they promise anyway, the temptation to pull an exit scam at such an early stage isn’t that great. However, it now seems that the people behind the project used fraudulent means to promote it from the start. Investors have found out that the images of “fans” the Prodeum team claimed on social media, were actually those of paid freelancers from the task marketplace Fiverr.
This isn’t the first time the site has been involved with shady ICOs. In fact, Fiverr is a known hotbed for cheap crowdfunding where you can even find people offering white papers for as little as $80.
Do you think this is a classic exit scam? Tell us what you think in the comments section below.
Images courtesy of Shutterstock.
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Author: Avi Mizrahi