Xangle report: ICO scams resulted in $16 billion stolen but only 10% were found guilty

Rick Steves

Xangle found 132 known initial coin offering scams worldwide, but we will never know how many did really take place and how much has been lost. Most importantly, it is still unclear how can investors and the industry avoid getting duped in the future. The FX industry seems to be taking a big chance as it includes Crypto CFDs in its trading offerings. Is it worth the risk?


Xangle, a crypto disclosure and transparency platform headquartered in Singapore, has published its most recent findings regarding scams within the cryptocurrency ecosystem, including all known crypto and digital currency-related investment scams that took place from Jan. 1, 2012, to Dec. 31, 2020.

The research was conducted using media articles, press releases, legal filings, and publicly available court documents. The document, Crypto Investor Scam Report, found that investors have lost an estimated $16,546,541,956 since 2012 across 132 different scams, but only 10.6% (14 projects) have seen their members charged and sentenced to date and 18% (24 projects)  have no known charges — civil or criminal. Of all the 132 fraudulent initial coin offerings, only 527 individuals have faced criminal charges for their roles in crypto-related scams.

Lihan Lee, co-founder of Xangle, said: “For the crypto asset class to reach its full potential, we must ensure that investors are protected and that those who defraud investors are held accountable for their crimes. As a community, we must join together to drive scammers out of the industry by making complete transparency a core pillar that every crypto project is built on top of.”

Just yesterday, the US Securities and Exchange Commission charged the founders of Start Options and B2G for defrauding hundreds of retail investors out of more than $11 million through two unregistered digital asset securities offerings claiming they were “the largest Bitcoin exchange in euro volume and liquidity” and “consistently rated the best and most secure Bitcoin exchange by independent news media”. It was all, of course, a sham and now the alleged fraudsters, Kristijan Krstic, Robin Enos, and DeMarr, will probably end up paying injunctive relief, disgorgement plus interest, penalties, as well as facing an officer-and-director bar.

As observed by Xangle’s report, legal consequences to such scams within the crypto space are almost null, which only serves as a powerful motivator for criminal minds. In the meantime, the cryptocurrency market cap is only getting larger. In May 2013, the total worth of the crypto market was found to be just over $1.5 billion, but after the most recent bullish momentum of late 2020, the digital asset market seems to be worth more than $1 trillion.

Xangle sources and curates on-chain data and assists in off-chain inputs to provide a 360-degree overview for any crypto asset. The firm’s mission is to apply advanced data analytics to resolve the transparency issue surrounding the blockchain ecosystem. Although their goal is noble, it is still hard to envision their effort resulting in a curb of ICO scams in the near or even distant future.

Given what is now known of the pervasive fraudulent activity in the cryptocurrency space, should the FX space be offering Crypto CFDs and exposing themselves to false assets with no underlying or intrinsic value?

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