Pincoin seems to be one of the latest exit scams in the cryptocurrency space. The Initial Coin Offering was able to gather $660 million dollars from 32,000 different investors from all over the world. And indeed, Pincon became one of the most successful in the last months.
The Pincon project was always looking like a Ponzi scheme. It was offering 48% monthly returns that not everyone could refuse. And indeed, it ended up with investors being scammed.
Back on January 12, the cryptocurrency called Pincoin (PIN) entered the market. And at that time, the project seemed legitimate. The project seemed legitimate since it had a professional white paper and good explanations about how users were going to be earning 48% per month. However, this was the starting point of a scam.
Investors gathered altogether $660,000,000 in Pincoin. Those funds were used by the ‘PIN Foundation’ a non-profit group that was built by an unknown number of Vietnamese individuals.
The project seemed under construction and users were not thinking about any possible scam. The white paper explained that the company was ‘building an online collaborative consumption platform for the global community.’
The Pincoin roadmap promised eight blockchain-based products that were going to allow users to have a good return on their Pincoins. The website was very professional and the graphics used had great quality. This has clearly had a positive effect on cryptocurrency enthusiasts that decided to invest their funds on the platform.
In sum, Pincoin was doing everything that experts and analysts consider necessary for an ICO to be successful. The roadmap was ambitious, there was a foundation in charge of managing the funds, they offered a product that could eventually revolutionize the market, the website and the white paper were very professional, etc. However, the returns offered were very high and too good to be true.
When they made the first payment to investors in cash, the deception began. The PIN foundation decided to launch a new cryptocurrency called iFan which was supposed to be a social media token for artists and celebrities. Several websites promoted the token. And users started to receive iFan tokens rather than PIN or other virtual currency actually traded in the market.
After the reports that showed that the company lost $660 million dollars, authorities in Vietnam decided to take action. And indeed, the Vietnamese Prime Minister himself decided to take the decision to investigate the scam and the issues.
However, the investigation started too late. The office building of Modern Tech revealed that the company annulled its contract and ran away without giving information about where they were operating. There are some individuals that are believed to be the masterminds of this scam, including Luong Huynh Quoc Huy, Luu Trong Tuan, Nguyen Duc Trong, Nguyen Trung Hieu, and Vu Huu Loi.
These criminals have already left their countries and it is almost impossible for authorities to confiscate the funds lost.
It is always important to pay attention to some issues before investing in an ICO. If the returns are too big, then, users should pay attention to it. Ponzi schemes and other projects promise very high returns. This attracts investors that are searching for risky investments.
The second thing that we can show about this company is that it had an over-ambitious roadmap. At the moment, most of the real virtual currency and blockchain projects are focused on delivering one or two platforms rather than eight, as Pincoin was offering.
At the same time, if the founders and advisors of an ICO are always appearing online and providing information about them, it gives credibility to the project. Nonetheless, Pincoin has never given any information about the founders or creators. The team behind Pincoin did not appear anywhere. This is quite important because users need to trust a group of experts building such an impressive number of blockchain products.
Although the white paper seemed very professional, in the end, it was just part of a bigger lie. It had several typing mistakes and missing spaces everywhere.
At the same time, when a project starts describing simple things using a complicated and technical vocabulary, that shows that they are artificially creating something that in the end is not in this way.
Users should always be very careful before investing in Initial Coin Offerings (ICOs). It is very important to study the topic, research about the project and learn more about the industry that the team wants to change. If the investor does not take the necessary time to evaluate the ICO, then they could end up scammed, as it happened with Pincoin.
As cryptocurrency projects are not easy to be developed, it is necessary to be backed by experts in different areas, including marketing roles or engineers. Investors should also closely follow the founders of these projects. In this way, they can really know what they do and how seriously the take care of the project.
Furthermore, if the crypto project is being backed by important companies such as let's say, Pantera Capital or an important investment firm, then it would be difficult for these projects to be a scam. In general, important institutions such as crypto funds would not be investing in projects that have been weakly built or with no real promises.
It is very important for investors to closely follow the projects they want to invest in. Investing funds is something that should be done carefully. Users should study these projects very closely, white papers, institutional investors, the team backing the proposal, and more.
If those initial coin offerings offer very high returns, then alarms should rise and a deeper investigation should be conducted. Companies that are regulated and obtained a licensed to operate in important countries have higher possibilities of being profitable.
During the last year, several scams affected the cryptocurrency space. This is why it is necessary for users to pay attention to the companies they want to invest in and decide to invest on them as soon as they have made an exhaustive analysis.