Scammers Steal $2M Worth Of Ether in Fake ICO

Scammers have reportedly stolen over $2 million worth of cryptocurrency after creating a fake initial coin offering.

The scammers created a fake LinkedIn profile and stole pictures from a different Instagram account, and used this invented person to convince more than 1,000 investors to invest in Giza and their ICO project, reported CNBC.

Investors who lost their money in the ICO scam said that they believed they were investing in a legitimate project until red flags started popping up, like the fact that the company cut ties with its sole supplier, and that there was no communication from the founders of the start-up. Investors were also unable to get hold of their funds, concluding that they have been scammed by the company.

Giza reported that it was developing a device which was extremely secure allowing investors to store their cryptocurrency tokens. The ICO was launched in January, staying open for a few weeks as investors bought tokens. In February, CNBC reported that Giza managed to raise more than 2,100 Ethereum coins, which priced at around $2.4 million. All but $16 worth of ether have disappeared.

In 2017 Giza associated itself with Third Pin, a Russian-based company that creates devices. Ivan Larionov, Third Pin’s Chief Executive posted on a bitcoin forum in late January revealing that his firm will no longer be collaborating with Giza.

Larionov confirmed that he was the one that posted on the forum. He said that in late December he was contacted by Giza and given the design for a device they wanted, but no technical details were provided.

The firm asked for the device $1 million and even signed a legal document. When Giza couldn’t answer some of Third Pin’s questions, Larionov started becoming suspicious.

When the CEO was asked by Giza to set up operations outside of Russia- a country with strict cryptocurrency rules– Larionov became even more wary of the company. And when the cost for the device reached $1.5 million and Giza did not make any installment payments, Larionov said he cut of all relations with the alleged start- up.

Around mid- February, the digital wallet address of the Giza’s ICO started experiencing significant outflows of Ethereum. This continued for two weeks, the last one occurring on March 2 — a majority of the funds being sent to various wallet addresses. Some investors have turned to Law enforcement in the UK to seek retribution for the scammers.

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