One of the biggest news in the ICO ecosystem is the upcoming Telegram initial coin offering. The messaging client announced a couple of weeks ago that they would launch a blockchain based version of the app and would raise the funds for the project through an ICO. Incidentally, the whitepaper for the project was leaked, effectively giving scammers an open check.
What is unclear is if the leakage of the whitepaper was an intentional act intended to cause a buzz before the buzz. It, however, seems to have been the incentive needed by the scammer who has leveraged it to set up phishing sites to which many an investor has fallen prey.
One of such sites is Gramtoken, aptly named after the telegram token Gram. The site sprang up in the wake of the announcement of the Telegram ICO and was neatly set to convince investors who were eager to cash in on what many perceived to be the next big ICO.
What may have been convincing about the site and which led to the partial accomplishment of its objective may have been that it came packaged with the authentic Telegram Open Network (TON) ICO whitepaper, which by the way was no longer secret, having been leaked earlier.
A number of investors were fooled into investing in the scam site. It is still uncertain how many investors did, or how much the scammers made away with. What is certain is that the site reader showed that as much as $5 million had been paid to the impostor Ethereum address before the site went offline.
It was not certain however if the site was taken down by the hosting company or by the scammers. Namecheap, the hosting company, when contacted by news sites to know if they were responsible for taking down the fake ICO site refused to make a statement.
Investors who lost money to the fake site took to Twitter to express their frustration on the incident raising fresh concerns on the risks involved in ICOs and token investments. Risks, which regulators and government agencies have been working round the clock to protect investors from. It is obvious that the onus lies on investors to conduct due diligence before parting with their cryptocurrencies.
Pavel Durov, the Telegram CEO seemed to have had the inkling that scammers were likely going to exploit the news of the TON announcement to try to defraud investors when he made a tweet earlier asking investors to source news about the upcoming ICO through the official Telegram channel. According to Mr. Durov, every other information not found on the official channel of the company would likely be a scam.
It is obvious that Gramtoken and other fake sites took advantage of the buzz created by the announcement to generate traffic that saw investors who couldn’t differentiate between a fake and genuine ICO buy into their scams. That the Telegram whitepaper was leaked seemed to have given these sites a measure of authenticity despite the fact that the Telegram TON ICO would be launched much later in March. Another factor that may have helped the scammers is that ICO news sites were already listing TON, the Telegram blockchain client in their sites as an upcoming ICO.
Interestingly, aside Gramtoken, other scam sites such as ton-gramico.io, grempreico.com and tgram.cc were still online after the discovery of Gramtoken. These other sites were apparently shut down later either by the hosting companies or white hackers. This has once again brought to fore the need for a regulatory framework on ICOs to streamline information and crowdsale. As the ICO ecosystem evolves, we likely would see this happen.