Top Failed ICO 2017

Learn about the reasons of ICO campaigns fails in 2017
23 October 2017   9416

General ICO market overview

The market of initial coin offering (also known as ICO or crowdsale) is an extremely stormy place. Volumes of funds, raised thru tokensale growth very fast. For example:

  1. For the first three years of the ICO Institute, from 2013 (when Mastercoin first sold its tokens to the ICO) until 2016, about $150M was raised. 
  2. In 2016 ICOs collected more than $250M (of which $150 million accounted for The DAO)
  3. From the beginning of 2017, 201 startups raised more than $3B thru ICO. 

ICO Stats 2017
ICO Stats 2017

The pace of such growth is truly amazing. As you can see on the graph above, the biggest amount of funds were rised in September (almost $850M).

But there is always the other side. Governments all over the world are seeking the way to regulate tokensales. Some of them go really hard, Chinese and Korean ICO bans hit hard on the cryptocurrency market. Some of them are more delicate, for example, France. Also, we cannot forget about SEC - US Securities and Exchange Commission is keeping an eye on ICOs, sometimes even suspects it in fraud

Not all crowdsale campaigns are successful, even those, which managed to raise large founding. Continue reading to learn about the most interesting failed ICOs of 2017.

Top Fail ICO 2017

So, let's start to review failed ICOs. Armed Ukrainian swindlers; project, that raised big funds but managed to start inner conflict and startups with interesting ideas included.

Swisscoin

On August 21, the General Prosecutor's Office of Ukraine, together with the National Police of the country, exposed the fraudulent Swiscoin project, whose creators are suspected of embezzling investments worth more than $ 500,000.

Results of searches at SwissCoin, p.1
Results of searches at SwissCoin, p.1

The offices of the company and the places of residence of citizens who took part in the project are searched. Money, weapons, and ammunition for it were found.

Results of searches at SwissCoin, p.2
Results of searches at SwissCoin, p.2

All participants of the project face imprisonment up to 12 years with confiscation of property.

The creators of Swiscoin, citizens of Ukraine and India, positioned the project as a "crypto-currency", promising to develop a system of instant, virtually interest-free payments anywhere in the world. Scam-project actively promoted in the press and announced cooperation with large trading networks and banks.

Results of searches at SwissCoin, p.3
Results of searches at SwissCoin, p.3

In this case, no whitepaper was published, and there was also no information about the developers.

Nevertheless, in February 2017, Swiscoin managed to attract more than $ 500,000 during the ICO. However, instead of the promised developments, investments were distributed among the creators of the "crypto-currency".

Tezos

Tezos was designed as a new decentralized blockchain that governs itself by establishing a true digital commonwealth. It facilitates formal verification, a technique which mathematically proves the correctness of the code governing transactions and boosts the security of the most sensitive or financially weighted smart contracts. When launched, Tezos will support smart contracts, using proof-of-stake as a consensus algorithm. With proof-of-stake, validators essentially set aside a portion of their tokens to increase their chances of being chosen to create the next block of transactions.

Despite the fact that Tezos was able to one of the most successful tokensale campaigns in whole ICO history, the conflict between management brought to panic among the investors and fall for 75% in few hours.

XTZ price chart
XTZ price chart

As you can see on a pic above, XTZ got really big bad price drop literally in few hours. Also, on 23.10.17 it has become known that investors initiated an investigation into Tezos. We cannot say that Tezos is 100% failed and we really hope that everything will be good in the future, but giant price drop and investigation by Boston law firm is no good for a project at all.

Slot N Slot

SlotNSlot was aimed to provide an ever-lasting, trustless, autonomous gambling platform with extremely low operation cost, where anyone in the globe can both make and play amazingly fun and incredible slot machines. With the aid of rising Ethereum world computer, the platform achieves fast and economical designs. 

Project's idea is not original, but it was well-documented and had a GitHub page and even beta version available for a play. But developers faced some issues and they would like to be honest with investors, so they canceled the ICO.

Along the progress of the project, we’ve believed that doing the crowdsale(ICO) is a part of validating the product, so we planned and progressed with the ICO in mind. However, we were not prepared with such detailed long term plan for the project and its use of the funds raised that investors could be satisfied and agree with. While designing and developing the structure of the platform, there seemed to be lots of difficulties and obstacles to make it fully autonomous, which made it much burdensome to stay anonymous. At current stage, we lack the confidence that the project can be a success, and enforcing the crowdsale in such conditions is an irresponsible decision. For this reason, we are retracting the crowdsale(ICO) for the project.
 

Slot n Slot team official announcement

Veredictum

The Veredictum platform is being designed to reduce film and video piracy, a $20bn global problem, by attacking the drivers of piracy, not just its symptoms:

  • Consumers not able to access content when they want, how they want and at a price point that is fair.
  • The lack of sufficient deterrents and tracking capabilities. The platform is being built in 4 phases: •
  • The ownership and distribution rights of producers’ content will be registered formally to a decentralized, global blockchain-enabled registry. A digital fingerprint is inserted into the video which links back to those rights. •
  • Members of the creative community will act as nodes within a decentralized structure to enable the distributed search and detection of digitally fingerprinted video content. By providing their unused computing power and bandwidth, Veredictum will be the SETI* of pirated content. Nodes will be rewarded with VENTANA, our cryptocurrency token.

Intersting project that failed the ICO. But team isn't sad and, according to official statement, is planning to re-do the model. 

The crowdsale, has, however, opened up so many doors for us with new potential clients who have seen what we are doing and are excited by our ambition to solve a major global problem for the whole creative space. As a result, we will be working with these great new contacts to develop market products that are focused deeply on solving the problem that just isn’t going away.
 

Veredictum Team

Ahoolee

Ahoolee is the world's first search engine for products! Ahoolee compares prices in online stores worldwide using a decentralized platform for collecting and indexing information from open sources with confirmation of authenticity based on the Blockchain technology.

Despite the fail of ICO, project's team says that they have worked on the mistakes.

What are we going to do next? We will repack the product. Perhaps we will rebrand it. Bring the globality of our idea to investors. We will conduct the pre-sale and ICO according to the usual market scheme, attracting large investors in advance. Actually, everything is just beginning!
 

Sergey Ryabov
CEO, Ahoolee

We can only wish good luck to Sergey and his team.

Conlcusion

As you can see by yourself, not all ICOs are successful. For some teams, even giant funds raised cannot bring true success fast. Stay tuned! In the nearest future we will release big material on the most succesful ICO campaigns of 2017.

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Centra Tech Inc. Co-Founder accused With Fraud by SEC

The US Securities and Exchange Commission (SEC) has charged Centra Tech Inc. co-founder, Raymond Trapani with ICO fraud  
25 April 2018   77

The charge came as the result of the SEC’s investigations into Centra’s controversial $32 million USD initial coin offering (ICO). Mr. Trapani is the third and final Centra co-founder to be accused for taking part in the ICO.

Raymond Trapani, a co-founder of Centra Tech Inc., has been charged by the SEC for his participation in “a fraudulent scheme connected with Centra’s 2017 ICO.” In 2017 Centra made headlines after enlisting celebrity approval from Floyd Mayweather and DJ Khaled. Two other firm`s co-founders, Sohrab “Sam” Sharma and Robert Farkas, were charged by officials earlier this month for their engagement  in the distribution of “CTR Tokens” to investors.

A changed variant of the SEC’s complaint demands that Trapani was the “mastermind of Centra’s fraudulent ICO,” with an SEC press release alleging that “Centra [was] marketed with claims about nonexistent business relationships with major credit card companies, fictional executive bios, and misrepresentations about the viability of the company’s core financial services products.” The SEC accuses Mr. Trapani and Mr. Sharma of “manipulat[ing] trading in the CTR Tokens to generate interest in the company and prop up the price of the tokens.”

We allege that the Centra co-founders went to great lengths to create the false impression that they had developed a viable, cutting-edge technology. 
Robert Cohen, Chief, SEC Enforcement Division’s Cyber Unit

 

The SEC has disclosed a text mail sent to Mr. Farkas and Mr. Trapani from Mr Sharma in what Mr. Sharma said to his colleagues “[w]e gotta get that s[***] removed everywhere and blame freelancers lol.” Mr. Trapani also demanded that Mr. Sharma “cook [him] up” a fraudulent document whilst the company was seeking to get CTR tokens listed on exchanges under misleading pretexts. Mr. Sharma replied to the request with “Don’t text me that s[***] lol. Delete.”

At the same time, the U.S. Attorney’s Office for the Southern District of New York has also looked for criminal accusations against Trapani. The SEC has revealed that text messages  jointly used between Centra’s co-founders discovered the scam purposes of the defendants.