The ICO and digital currency space may well be the freest market in the world. With little or no regulations and a level of anonymity thrust upon it by the blockchain, it is a market in which people have made fortunes and lost them. Losses arise mainly due to hacker activities or scammers packaging ICOs, or even because teams lack the competence to execute projects they advertised. Then we cannot discountenance the very volatile nature of digital currencies.
The latest exit scam is the Prodeum ICO whose website went off the internet days after their crowdsale ended. The company which promised to revolutionize the fruit and vegetable industry using blockchain didn’t even make effort at pretending that the website was hacked as is common with exit scams, rather they deleted their website replacing the text with an obscene message.
Lisa Kilker, one of the subscribers to the Prodeum ICO said “Prodeum just milked their investors and changed their website to this. I find it hard to even hate them”.
There were indicators that the ICO might be a scam when users discovered that the images of people who wrote the Prodeum websites on their bodies were freelancers who were hired at Fiverr, the Israel based freelance websites where freelancers work for as little as $5. This is contrary to the claims of the Prodeum team that those images belonged to fans of the company.
Considering that investors do not really have ways to compel teams and companies who are based abroad to follow through with their promises, scam ICOs seem to hold the aces on both ends, especially when they are based abroad. Besides this point, scammers do not use IDs that can be traced to them and usually have their tracks well covered.
Although subscribers termed the Prodeum ICO a premeditated scam, it is unclear how much the scammers made away with since the campaign was not really hyped like most exit scams. There are indications that the Lithuania based company was more of a college prank than a scam as it was observed that the receiving wallet did not contain as much funds as would have been expected from an exit scam. Though there still is a possibility that the scammers made their money through other channels.
Lithuania is one of the Eastern bloc countries that has embraced the blockchain technology knowing its prospects as a vehicle for wealth creation since the price of bitcoin soared. Prodeum may just be an effort by a group of youths to create wealth for themselves. Just as the Product Manager, Rokas Vedluka (apparently faked ID) said ominously, “ It is an idea whose time has come”.
That the Prodeum exit scam did not generate as much furor as Confido or Benebit scams may be indications that there was not much loss incurred by investors through it. This may be the result of the fact that the team or individuals behind the ICO put in little in its marketing effort and the ICO was barely known, unlike other exit scams that generated a lot of buzz, hype, and money for the scammers.
Such as Benebit that was rumored to have spent up to $500,000 in marketing funds alone. Benebit exited when it was discovered that they had used fake IDs pulled from a school website, but not without the $3 million already contributed by investors.
In retrospect, it can be said that there were signs that showed that the Prodeum ICO was a scam. Though the investors could hardly be blamed because scams are as sophisticated as they can get and are always improvising to get ahead of the victims. The name Prodeum is similar to the name of the drug used for urinary tract infection treatment. The word left on the Prodeum site after it was deleted is a clue.
The poor marketing effort of asking freelancers to write the company’s website on their skin may have been seen as ingenious, but the discovery that those were freelancers and not fans as the company claimed should have been another red flag.
Although no one is sure how much investors lost, an unconfirmed blog post by someone who claimed to be the scammer said that the amount was $3000. In the blog post, the scammer claimed to also be behind Bitflur and Magnalis, claiming that they have made a total of $50,000.