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Governments Taking Action on ICO Scams
Canadian Authorities Freeze Assets of ICO Promoter Vanbex
In 2017 to 2018, there was massive ICO hype. It was around
that time that Bitcoin spiked in value from $1000 to $20,000 and Ethereum
followed suit. Many investors were looking to pour massive funding into what
they believed would be the next Bitcoin or Ethereum. Naturally, many half-baked
projects popped up as well as blatant scams, all looking for investor funds. It
does seem that more and more governments have been taking action against some
of the bad actors.
ICO promoter Vanbex group has had their assets seized by Canadian authorities. Vanbex was the parent company of ICO project EtherParty & the cryptocurrency FUEL. All were founded by Kevin Hobbs & Lisa Cheng.
EtherParty managed to raise the equivalent of $33,000,000 in 2017 as per ICObench. The token served as one of the first DApps on Ethereum & offered a smart contract wizard as its function. Unfortunately for investors the token, the ROI was -90% and it currently seems to be heading to 0.
Mounties Moving In?
As per Duhaime'sAML blog, the founders of Vanbex have come under investigation by the Royal Canadian Mounted Police (RMCP). They have been accused of a multitude of criminal charges that include fraud and tax offences.
According to the courtdocuments, Vanbex founders Kevin Hobbs & Lisa Cheng misappropriated investor funds for personal gains. This includes the purchase of two luxury condo's, one in Toronto, the other in Vancouver. Both have been evaluated at over $3.5 M. They have also purchased & rented luxury vehicles. Hobbs has also been accused of losing nearly $2 M of the ICO investment funds in a casino.
The courts claim that nearly two years after the ICO concluded, no product development took place.
In addition to the current investigation, it is now apparent that Hobbs has had a long criminal record.
He was previously arrested 3 times in the past, in 2005, 2008 and 2009.
2005 - convicted in the US for possession of 100 pounds of marijuana in an incident in which he also had US$178,000 in cash in a suitcase.
2008 - convicted of possession of proceeds of crime for having $32,000 in cash in heat sealed plastic bags in a suitcase at an Airport and of laundering the proceeds of crime.
2009 - convicted in connection with a grow-op operated from a home he was renting and of unlawful possession of marijuana.
So far things do not look bright for Vanbex, EtherParty or Fuel. Many have taken to Reddit & the EtherParty to voice their concerns but have been censored. One may assume that this might end in lengthy prison sentences for Cheng & Hobbs.
When investing in ICO's always do your due diligence & also look into the tech. Keep in mind that most successful projects started with very small investment amounts.