Another company promising investors riches in an initial coin offering has shut down in an apparent “exit scam” after raising $4.5 million from victims through a combination of bitcoin and Ethereum.
The “company,” called LoopX, was offering LPX tokens that would be used to fund an investment platform. That allegedly involved a “new kind of trading software based” on the “Loop-Algorithm” that after testing was claimed to deliver “great profits continuously every month.” If the pitch doesn’t sound scammy enough already, the ICO offered “guaranteed profits every week thanks to the most advanced Trading Software out there to date,” via “weekly interests [sic].”
A warning that all was not above board was raised by a Reddit user on the r/cryptocurrency subreddit in January. The user wrote that LoopX is actually “functioning like a bond or any other form of financial instrument: give us your [money], we’ll use it to make propitious trades, then we’ll reward you with interest derived from the trades we make with your capital (represented, of course, in some quantity of LoopX coins).”
The same user went on to note multiple red flags, including lack of transparency with both the platform and the development team, false claims of digital presence, and dubious promises of consistent profits and interest payments.
Suggesting that LoopX was an exit scam from day one, all presence of the company online has now been deleted, not only its website but all of its social media accounts.
LoopX joins a growing list of recent exit scams that include Confido, Prodeum and arguably BitConnect. Other initial coin offering scams were shut down before they finished raising funds. The most notable among those was AriseBank, a company that was selling tokens to assist in establishing the “first decentralized bank to offer the first and largest cryptocurrency banking platform in the world.” It was shut down by the U.S. Securities and Exchange Commission Jan. 30 but only after taking $600 million from investors.
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