A national Committee of experts on the techniques of financial security on the Internet (IFCERT), a Chinese organization backed by the government, found 421 fake cryptocurrency, 60% of which are deployed abroad.

Friday IFCERT published the results of its analysis of false cryptocurrencies, in which he said that:

“In recent years, virtual currencies such as Bitcoin, Litecoin, Ethereum, etc. are unchanged. Some criminals engaged in financial fraud or create pyramids under the form of virtual currency, resulting in investors suffering big losses.”

Also IFCERT wrote in his report that his national platform for the analysis of the financial risks associated with Internet technology constantly monitors fake cryptocurrency.

“The report shows that as of April 2018 IFCERT found 421 fake cryptocurrency, of which more than 60% of all coin fake servers were outside the country, which is difficult to detect and track platforms these fake cryptocurrency”.

The Committee has identified some key warning signs of these fake cryptocurrency. First, they use a “pyramid” business model, arguing that their cryptocurrency will have a high yield.

Secondly, as reported IFCERT, they have no real code. They either don’t have the blockchain, or can’t generate blocks for him.

Thirdly, as they will not be offered in the legal cryptomeria, it is often traded in OTC or private exchanges.

“The prices on those platforms are largely controlled by organizations or individuals that, as a rule, creates the illusion of rapidly rising prices. However, users are often unable to carry out transactions and to withdraw cash,” the report says.

IFCERT stressed that fake cryptocurrency have no value and are illegal, adding that many of these platforms do not have offices and do not disclose information about your business, and the servers are often located abroad, therefore, victims of fraud will be difficult to get your money back.

On Thursday The Wall Street Journal also published the results of its own analysis of the documents prepared for 1450 primary offerings of coins (ICO). The publication revealed 271 ICO “red flags”, including plagiarism in documents, promises of guaranteed return and information about the teams that either do not exist or are irrelevant to the designated project.

According to the publication, investors have invested in these “suspicious” ICO more than $1 billion, with some of these companies are still collecting funds, and some of them are completely closed. According to the lawsuits, investors have already announced losses in these projects for a total amount of 273 million dollars.

Recall that in late March, a study was published experts of the consulting company Satis Group, which showed that 80% of the ICO are part of fraudulent schemes. In addition, only 8% of tokens circulated via ICO, get on the stock exchange.