New Brunswick Tricked Crypto Investors to Teach About ICO Fraud
New Brunswick’s Financial and Consumer Services Commission (FCNB) has created a fake website and ICO in a bid to educate investors on the danger of cryptocurrency scams.
The FCNB created TydeCoyn.ca, offering Canadians the opportunity to invest in a “cryptocurrency token that marries tourism promotion and environmental activism.”
The TydeCoyn “scam”
The fake scam is complete with its own YouTube video “presenting a new way to make tourism sustainable.”
“We’re using blockchain technology to create a better and more sustainable future for our waterways, our wildlife and our families. That’s the TydeCoyn mission,” said the YouTube description.
The website describes an ICO where tokens can be used to pay “dozens of tour and trip operators in New Brunswick.” The tokens can be “traded” and each purchase of Tydecoyn tokens “automatically sends a portion of the sale amount to one of several participating wildlife foundations or organizations.”
Investors are promised “expected rates of return on each pre-ICO token at 85%, with that number expanding to 115%,” according to the Tydecoyn.ca site.
Clicking on “Invest Now” however, quickly fields potential investors to the FCNB website which lets “you in a little secret,” that “it’s fake.”
Only invest if you’re “emotionally and financially able”
FCNB created the site to educate investors “about the all-too-real dangers of participating in online ICOs,” said the provincial regulators. Adding, a “few red flags crop up in fraudulent ICO activity time and time again – we made sure to hide several in the website.”
Did you hear about Tydecoyn? It’s a once-in-a-lifetime opportunity to invest in New Brunswick’s local environment – AND, it’s completely made up. Can you spot the red flags of this scam? https://t.co/tzQuH3wsQr pic.twitter.com/HORRq2tZXv
— FCNB (@FCNB_) December 3, 2018
The “red flags” included unsupported and impossible promises of guaranteed returns and offered limited transparency of the founding team and other supporters.
ICO fraudsters “use fancy terminology and vague technical speech to lure consumers into a false sense of security, where they make it sound like the impossible is actually possible: no risk, all reward,” said the FCNB.
The regulator warned against ICOs which don’t reveal clear contact information for founders and partners. Good investments should have two way information flows. Namely, investors should be able to easily raise questions and have them answered.
“Serious companies need more than an IP address or a digital wallet address to do business with customers,” said the FCNB.
The fake ICO also included a countdown clock.
“If someone is trying to rush you into making an investment, odds are that their “opportunity” won’t hold up under increased scrutiny,” explained the FCNB.
“Interested investors should not participate unless they are emotionally and financially able to assume the risk of losing their entire investment,” warned Erin King, FCNB’s Senior Education and Website Officer, speaking to Wealth Professional.
The FCNB website points those either fooled by the website, or curious enough to find out more, to its investor education material. Credible cryptocurrency businesses and exchanges often also aim to educate investors without bias on how to examine opportunities.
Image credit: TydeCoyn.ca
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