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5 ludicrous cryptocurrency exit scams that regretfully happened in 2018

When you say “cryptocurrency,” you’d be forgiven if one of the first things that comes to mind is: “exit scam.”

Exit scams refer to those cunning plots, whereby blockchain startups collect investors money, often through initial coin offerings (ICOs), only to disappear suddenly, along with any the funds raised.

This happens so frequently that by August, more than $100 million in funds contributed to ICOs had been stolen as part of an exit scams in 2018.

They’re indeed such a common occurrence, odds are there a handful you have forgotten actually happened this year.

While this may not be an exhaustive compendium, consider this a humble ode to the exit scammers, you bunch of selfish jerks.

1. The exit scam that was, and then suddenly wasn’t

Earlier this year, just as the dizzying effects of the bull market were wearing off, one cryptocurrency “company” decided to pull a ludicrous publicity stunt.

A blockchain startup, Savedroid, whose claim to fame was raising $50 million through an initial coin offering (ICO) in the heat of 2017’s crypto-mania, bombastically replaced everything on its website with this meme:

What followed was a blatantly arrogant tweet from the project’s founder, sitting on the beach, drinking a beer. It simply read: “Thanks guys! Over and out … #savedroidICO.”

Unsurprisingly, many rightfully assumed this to be yet another cryptocurrency exit scam, with independent researchers across the internet flexing their detective skills to pinpoint exactly where the tweets were coming from.

Turns out, the whole thing was a heavily manufactured PR-stunt. When an outraged community called Savedroid out for tricking the public, its team excused themselves by claiming it was their way of teaching the industry “a lesson.”

It’s hard to say if we really learned anything, though, other than Savedroid has an absolutely tasteless marketing team.

2. South Korean crypto-startup disappears with $2.7M

Last month, ringleaders of cryptocurrency scam named “Pure Bit” exacted the final stage of their plan: screwing over all of their investors.

As with all effective exit scams, the project’s founders suddenly took down their website and disappeared with at least 13,000 ETH ($2.7M at the time).

The funds had been raised via an initial coin offering throughout November this year, under the guise of launching a new, very profitable, ERC-20 token through the Ethereum blockchain.

Transaction histories showed all of the investments were suspiciously moved in the hours before their KakaoChat was wiped clean, along with all of Pure Bit’s related social media channels.

In hindsight, there were certainly red flags. Part of Pure Bit’s plan for a successful ICO was establishing a seemingly profitable affiliate program reminiscent of a Ponzi scheme.

Of course, this included promises of dividends for holders and rewards for recruiting new members.

3. A classic cryptocurrency exit scam, with a cocky twist

This incident is undoubtedly one of the most arrogant exit scams of cryptocurrency history.

At the start of the year, Prodeum caused a stir with a seemingly plausible plan to create a fruit and vegetable coding system for tracking produce on the Ethereum blockchain.

All seemed well until one night, the Prodeum site was scrubbed, replaced with simply one word.

The startup’s Twitter page, LinkedIn profiles, and white paper disappeared around the same time. One person did come forward, a person listed as one of the project’s founders.

In a brief social media message, he claimed to be the victim of identity theft. He implored he had never heard of the “business,” and was doing his best to figure out who had stolen his identity.

So while it remains unclear just who was behind the fraudulent Prodeum ICO, estimates suggest the scammers made away with anywhere from 430 ETH to 970 ETH.

At the time, these amounts were worth between $500,000 to $1 million.

4. Fraudsters trick investors out of $4.5M with fake trading algorithm

The next exit scam is nothing but a cautionary tale for newer cryptocurrency investors.

LoopX promised the blockchain industry a cutting edge trading algorithm capable of automatically securing amazingly consistent profits.

“Our software handles over 10,000 trades per second and calculates over 100 currencies at a time,” associated marketing material declared. “Always looking for those opportunities to make profits bigger then 10%, which will payed out to our members on a weekly basis.”

As with all exit scams, there came a moment where it all came to a head, and the lofty promises were revealed to be nothing but an elaborate ruse.

Seemingly all at once, the company scrubbed its social media fingerprint from the internet, deleting its Facebook, Twitter, YouTube, and Telegram accounts.

At one point, its website had declared total ICO pledges had amounted to 276 BTC and 2,446 ETH, which at the time rounded out to $4.5 million.

5. All hail the King of the Exit Scam – BitConnect

Yep, the BitConnect exit scam totally happened in 2018. Feels like years ago, doesn’t it?

As with all blatantly obvious Ponzi schemes, BitConnect succeeded by structuring its “business” using tiers. “Investors” were promises up to 40 percent returns on any funds sent to the platform.

A four-tiered system meant revenue was supposed to increase with more money invested.