An Ethereum Startup Just Vanished After People Invested $374K
“These were very good scammers.”
A startup on the Ethereum platform vanished from the internet on Sunday after raising $374,000 USD from investors in an Initial Coin Offering (ICO) fundraiser.
Confido is a startup that pitched itself as a blockchain-based app for making payments and tracking shipments. It sold digital tokens to investors over the Ethereum blockchain in an ICO that ran from November 6 to 8. During the token sale, Confido sold people bespoke digital tokens that represent their investment in exchange for ether, Ethereum’s digital currency.
But on Sunday, the company unceremoniously deleted its Twitter account and took down its website. A company representative posted a brief comment to the company’s now-private subforum on Reddit, citing legal problems that prevent the Confido team from continuing their work. The same message was also posted to Medium but quickly deleted.
“Right now, we are in a tight spot, as we are having legal trouble caused by a contract we signed,” the message stated (a cached version of the Medium post is viewable). “It is likely that we will be able to find a solution to rectify the situation. However, we cannot assure you with 100% certainty that we will get through this.” The message was apparently written by Confido’s founder, one Joost van Doorn, who seems to have no internet presence besides a now-removed LinkedIn profile.
Even the Confido representative on Reddit doesn’t seem to know what’s going on, though, posting hours after the initial message, “Look I have absolutely no idea what has happened here. The removal of all of our social media platforms and website has come as a complete surprise to me.” Motherboard reached out to this representative over Reddit, but hasn’t received a response.
Confido tokens had a market cap of $10 million last week, before the company disappeared, but now the tokens are worthless. And investors are crying foul.
“I got scammed big time,” user cioloxl wrote in the Confido thread on popular cryptocurrency forum Bitcointalk. “This was a very valuable lesson for me, in both senses of the word.” Another user, masternode, was more measured, but no less angry. “This is a punch in every single investor's face,” they wrote.
At this point it’s unclear what will happen to the $374,000 that investors put into the Confido project. At the very least, TokenLot, the website that ran the ICO on behalf of Confido (TokenLot does this for many startups), sounds like it’s having a busy day. “We’re the only remnant online right now in terms of people contacting us asking for answers,” said Eli Lewitt, co-founder of TokenLot, over the phone. “These were very good scammers.”
While many cryptocurrencies are still trying to find a useful application in the real world, Ethereum has become a darling among financial types because ICOs allow startups to raise huge investments in lightning-fast funding rounds. But a dark spectre has loomed over the frenzy since the digital gold rush began: What happens if a bad actor is hiding out among the bunch, and simply disappears?
Well, we might be about to find out.
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