China Has Found 421 Fake Cryptocurrencies
A Chinese government-backed industry organization has published a report on fake cryptocurrencies. As of April, its monitoring platform has found 421 fake cryptocurrencies, 60% of which are deployed overseas. The Committee has also outlined major red flags of these cryptocurrencies.
421 Fake Cryptocurrencies
IFCERT’s National Internet Financial Risk Analysis Technology Platform continuously monitors fake cryptos, the Committee detailed, elaborating:
As of April 2018, the technology platform has found 421 fake virtual currencies, of which more than 60% of fake virtual currency website servers are deployed overseas. Such platforms are difficult to find and difficult to track.
The Red Flags
Secondly, they have no real code, IFCERT described, noting that they either do not have a blockchain or cannot generate blocks for one.
Thirdly, they will not be traded on legitimate cryptocurrency exchanges, "so they often trade on over-the-counter or proprietary exchanges,” the report detailed, adding that:
There is a phenomenon that prices [on these platforms] are highly controlled by institutions or individuals, which tends to cause the illusion of rapid price increase. However, users often cannot conduct transactions or withdraw cash.
IFCERT emphasized that fake cryptocurrencies have no value and are illegal, asserting that 'Many of these platforms do not have business premises and business information, and servers are often deployed overseas,' so it will be difficult to recoup any losses for victims.
271 Fake ICOs
On Thursday, the Wall Street Journal independently published its finding after a review of documents produced for 1,450 initial coin offerings (ICOs). The publication "has found 271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.”
Investors have poured more than $1 billion into these 271 ICOs, the publication detailed, adding that 'some of the firms are still raising funds, while others have shut down. Investors have so far claimed losses of up to $273 million in these projects, according to lawsuits and regulatory actions.'
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