$374,477 Worth Of Crypto Just Vanished
$374,477 of investor money just vanished.
Investors will never recoup their losses.
And even worse, the people responsible will never face the consequences.
Here’s the story…
From November 6th through 8th, an Ethereum-based cryptocurrency called Confido raised $374,477 in an initial coin offering (ICO).
[And ICO is the process that cryptocurrencies go through to get to market — similar to a stock IPO.]
According to blockchain forums, Confido differentiated itself from the thousands of other cryptocurrencies sprouting up by claiming to have the ability to track shipments and make payments — possibly useful in today’s e-commerce boom.
Source: Tech Crunch
However, their investment didn’t turn out as planned…
ICO’s Are Just As Dangerous As We Imagined
Last week the Confido team disappeared without notice.
Their website was shut down.
Their Twitter account was deactivated.
And the personal Facebook, Twitter and LinkedIn pages of founder Joost van Doorn also disappeared this past week.
The only trace of the team is a Reddit post from a man claiming to Joost.
“Legal trouble caused by a contract we signed. We signed the contract with assurance from our legal advisor that there was minimal risk and would not be an issue. I can’t go into details, but he was wrong. It is a problem.”
Here’s the full statement:
Don’t believe the sob story.
These people planned this scheme from the start.
In fact, Joost claimed in his company bio that he had experience working for eBay, PepsiCo and Zalando. But CNBC recently confirmed that two of those companies have no record of him.1
And what legal matter would require a company to delete all forms of communication — including the founder’s personal social media pages anyway?
Investors in their ICO entrusted hundreds of thousands of dollars (which when measured at the current price of Ethereum is now worth around $580,000) to these “entrepreneurs” expecting a return and these people took full advantage of them.
Whereas IPO-bound companies are required to register with the SEC, which requires them to maintain certain standards like…
- Issuing annual and quarterly financial data
- Maintaining a high level of accounting
- Making extensive disclosures about operations
- Holding management personally liable for misstatements and omissions
ICO’s on the other hand have no such standards. These “companies” are completely unregulated — which presents scam opportunities for gutsy con-artists with coding skills — aka the Confido team.
If you’re invested in the cryptomarkets, we here at The Daily Edge recommend that you only use money you can afford to lose.
Now let’s get to the most important stories every investor needs to know…
5 Must Knows For Monday, Nov. 27th
Tax Vote Already?- The tax bill is still front and center on Congress’ agenda this week as Republican leaders now hope to have a bill to vote on by this Thursday, November 30th. As of now, 4 GOP Senators are still against the legislation. And with only 2 seats over majority, they’ll need to do some convincing before this gets passed. Trump may handle that part today as he is scheduled to have lunch with VP Pence and members of the Senate Finance Committee.
Black Friday Booms- The day after Thanksgiving was a successful one for both retailers and e-tailers. Adobe Insights predicts that a record $5.03 billion was spent online this Black Friday, an increase of 17% from 2016. While retailers like Kohl’s, Macy’s and JC Penney are all reporting record sales for the unofficial holiday. This week is set up to continue the record revenues as “Cyber Week” gets underway. Let’s see how retailers like Walmart, Macy’s and Kohl’s can compete with Amazon.
Oil Prices On The Brink-This week, OPEC and Russia plan to meet in Vienna to discuss extending production cuts. So far their strategy has worked out as WTI now sits around $59 per barrel. However, the big concern for both OPEC and Russia is how the U.S. shale industry will react to their production cuts. Remember, shale producers still have thousands of unfinished wells just waiting to be brought online. And if prices rise high enough, operating those wells will only become more profitable.
Cryptos Surge- The holiday weekend was good to crypto-investors. Bitcoin spiked above $9,000 and currently sits around $9,600 as I write this. Ethereum sits around $470 — a one week increase of $140. And Litecoin sits at $90 for a one week increase of $18. Tread carefully if you’re in this space as the bottom keeps getting farther.
Powell’s Confirmation- On Tuesday, November 28th, President Trump’s nomination for Fed Chairman Jerome Powell will go before the Senate Banking Committee for confirmation. This isn’t expected to be much of a debate. After all, Powell does don the nickname “Republican Yellen.” However, his hearing could offer insights into how he plans to run the central bank — something investors should pay attention to.
Here’s to keeping your edge,