The initial coin offering (ICO) funding scheme has been around for a while, and although it helped various organizations, it also led to a lot of scams. The latest crypto startup to trick its investors is LoopX, which vanished after raising $4.5 million in its ICO.
According to a cached version of LoopX’s website, which has now been taken down, the startup was a sketchy investment platform. It promised to earn investors some money through a proprietary trading algorithm. Once its ICO was over, the crypto startup vanished. Its website was taken down, and all of its social media accounts – including Twitter, Facebook, and Telegram – are gone.
The cached version of LoopX’s website reveals it received a total of 276 Bitcoin and 2,446 Ethereum tokens from investors. At press time, this equals roughly $4.5 million, acquired through five different token sales held in January.
The crypto startup’s page read:
“After testing our algorithm thoroughly over half a year with great profits continuously every month, we can now finally bring all this advantages of our LoopX – Trading Software to the public. (…) The LoopX System gives you guaranteed profits every week thanks to the most advanced Trading Software out there to date!”
LoopX further boasted of having software capable of handling over 10,000 trades per second and calculate 100 currencies at a time. It was supposedly going to pay back investors on a weekly basis.
A roadmap posted on the Bitcointalk forum shows the company planned on launching its lending platform in February this year.
LoopX isn’t the only one pulling an exit scam
Investors seemingly lost $4.5 million worth of BTC and ETH after investing in LoopX. Interestingly, the project didn’t bring anything new to the table. Its “trading software” approach had in the past been used by alleged Ponzi scheme BitConnect, which recently shut down its lending platform. The move even led to it being hit with a class action lawsuit.
The project’s whitepaper claimed the “common investor” could now be a part of the financial revolution and become financially independent. This, while relaxing and just watching the money grow using LoopX. If something sounds too good to be true, it usually is. An attentive Redditor advised the project looked like a potential exit scam over a month ago. Seemingly, some investors didn’t listen.
As covered by Core Media, Lithuanian-based startup Prodeum also pulled an exit scam earlier this year. It left investors with a blank webpage that read “penis,” and vanished from the internet with their money. Davos, a BitConnect-like platform, also shut down after receiving a cease-and-desist from Texas regulators.