Largest ICO Exit Scam to Date: Up To USD 4m Gone
After pulling in an estimated USD 2.7 million to USD 4 million of investor funds, the Benebit ICO has disappeared with the money as of January 22.
The fraud came to light after people noticed that the team photos had been taken from a school website. After this, the Benebit team disappeared: their page is displaying a steady 502 error, all their social channels have been erased, and ICO review sites either deleted or updated their reviews. The case is believed to be the largest ICO exit scam to date.
According to the cached version of their website, it was “a global decentralized ecosystem that enables interaction without borders between brands, companies and consumers and is built on Blockchain technology. Benebit is a disruptive network for the cashback and loyalty market based on blockchain technology.” While filled to bursting with buzzwords, its purpose can be summarized as creating a currency for customer loyalty.
Ankit, the Benebit Telegram channel admin, says they were also duped: “We got their passport as proof of identity. Which is fake. We were hired for community management. There are a lot of service providers hired by these guys. And everyone was scammed by them.”
ICO Syndicate did its part by requesting a passport to verify identity, but apparently didn't thoroughly check the rest of the project or take any concrete steps to verify the authenticity of the passport.
An ICO investment site who used to have Benebit listed as a Junior on the platform, ICO Watchlist, explained in their disclaimer: “Our hearts go out to those who might have lost their funds to this project. As we consistently remind people, ICOs are high risk ventures and it is imperative that investors do their own due diligence before making commitments.”