Another ICO scam has been disclosed recently, which involves Eran Eyal of UnitedData who raised $42 million through Shopin tokens and cheated the investors. The capital supposedly had been raised for creating shopper profiles including their transactions and shopping activities on a blockchain-based platform. But instead, the funds have been misused for personal expenses. Eyal allegedly has used half the million dollars on shopping, entertainment, paying rents, and even for dating services. As per SEC allegations, Shopin and Eyal have deceived the investors by never creating a functional platform as per their promises and provided false information of involvement of some big wigs in the project. They also disillusioned the people about their partnership with various reputed retail firms. The US Securities and Exchange Commission (SEC) has charged Eran Eyal under federal securities law for violating the antifraud and registration act. He has also been charged for deceiving innocent investors with millions of dollars providing false information.

Reports from the Industry 

Earlier this year, reports from Cipher Trace Research firm from Silicon Valley revealed that 2019 has emerged as the year of exit scams. It has estimated that approximately $4.26 billion have been duped in the year 2019. The scammers generally raise millions of funds by launching cryptocurrencies or tokens and vanish without any traceability. Because of the decentralized and anonymous nature of the crypto industry, it often becomes tedious for the investigating agencies to trace the fraudsters. Official data reveals that $9 million are lost every day in crypto-related fraudulent scams. These figures are scary and an eye-opener for the crypto investors who fantasize about cryptocurrencies and vouch on their incredible features. Security agencies, crypto exchanges, governments, financial institutions across the world are taking precautionary steps to address this issue. SEC in US has been vigilant in the recent years and is taking stern action to curb crypto-related scams. Investors can follow certain guidelines lines to avoid falling prey to such fraudsters. In the US, the SEC and the Financial Enforcement Network (FinCEN) have recently released clarifying guidelines for the crypto companies navigating the regulatory policy about their businesses.

Rating the crypto assets- A solution to Minimize risk in investments 

Crypto-asset Rating firms are now paving the way for the investors to address the growing risks of investments in crypto assets. Crypto Asset Rating (CAR) is the USA-based Independent Structured Rating Agency that is functional in this space. It is developing an algorithm to evaluate digital assets deploying hundreds of parameters and rate them for the diversified investors. Crypto Asset Rating rates digital assets with more than 125 essential quantitative and qualitative parameters and rate these assets impartially.  CAR is developing a Crypto Assets Rating Platform (CARP) for analysis of the digitized currencies. It has an in-house team of financial analysts and technical experts

The firm claims that the rating won’t be the ultimate investment advice for the investors, but it will surely serve well as an impartial beacon to invest in the crypto assets wisely with minimum risk and maximum returns.                                     

Crypto Business World

CBW - External Analyst

INDIA