The national Council of experts on technology of financial security on the Internet (IFCERT), funded by the government of China has published the results of the analysis of the fake cryptocurrency. This writes Bitcoin.com.
“In recent years, virtual currencies represented by bitcoin, Litecoin, Ethereum, etc, are constantly attracting attention,”writes IFCERT. “Some criminals organize financial pyramids and other fraudulent schemes under the guise of virtual currencies. Often fake cryptocurrency cause serious financial losses of investors.”
The Council reports that the use of the National technological platform to analyze financial risks on the Internet to on a regular basis to monitor such digital currencies, adding:
“As of April 2018 technology platform found 421 fake virtual currency. More than 60% of servers which are the sites of these currency located abroad. Search and monitoring of such platforms associated with significant difficulties”.
The Council also explained what the disturbing characters he focuses upon identifying fake cryptocurrency. First, such schemas use “pyramid” business model, together with the promise of high returns.
Second, they have no real code. IFCERT draws attention to the fact that the fake digital currency not use blockchain and transactions with their use are not added to the blocks.
Thirdly, they are not traded on a full-fledged cryptocurrency exchanges, but only for “over-the-counter sites or specialized markets.”
“On these platforms there is observed a phenomenon in which the prices are largely controlled by institutions or individuals, allowing them to create the illusion of skyrocketing prices. Users, however, often are unable to conduct transactions or to withdraw cash” — adds IFCERT.
The Council stresses that the fake crypto-currencies have no value and unlawful, adding: “a Lot of these platforms has its own premises and does not provide information about the business, and their servers are often located abroad.” The same factor explains the inability of the refund defrauded investors.
This week my research on similar topic published by the Wall Street Journal. According to the conclusion of the authors of the material from 1 450 analyzed by ICO 271 filed “alarming signals concerning the plagiarism of investor documents promise a guaranteed income and inaccurate information about the management”. These 271 ICO managed to collect more than $1 billion, with $273 million can be officially considered lost.