China Has Found 421 Fake Cryptocurrencies

May 19, 2018
43 Views

A Chinese government-backed industry organization has published a report on fake cryptocurrencies. As of April, its monitoring platform has found 421 fake cryptocurrencies, 60% of which are deployed overseas. The Committee has also outlined major red flags of these cryptocurrencies.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

421 Fake Cryptocurrencies

The National Committee of Experts on the Internet Financial Security Technology (IFCERT), a Chinese government-backed industry organization, published the results of its analysis on fake cryptocurrencies on Friday.

Citing that “In recent years, virtual currencies represented by bitcoin, litecoin, ethereum, etc. have received continuous attention,” IFCERT pointed out that “some criminals are engaged in financial fraud or pyramid schemes under the cover of virtual currency.” The Committee added that fake cryptocurrencies frequently appear, “causing investors to suffer major losses.”

IFCERT’s National Internet Financial Risk Analysis Technology Platform continuously monitors fake cryptos, the Committee detailed, elaborating:

As of April 2018, the technology platform has found 421 fake virtual currencies, of which more than 60% of fake virtual currency website servers are deployed overseas. Such platforms are difficult to find and difficult to track.

The Red Flags

The Committee outlined some major red flags of these fake cryptocurrencies. Firstly, they adopt “pyramid-based” business models, claiming that their cryptocurrencies will generate high returns.

Secondly, they have no real code, IFCERT described, noting that they either do not have a blockchain or cannot generate blocks for one.

Thirdly, they will not be traded on legitimate cryptocurrency exchanges, “so they often trade on over-the-counter or proprietary exchanges,” the report detailed, adding that:

There is a phenomenon that prices [on these platforms] are highly controlled by institutions or individuals, which tends to cause the illusion of rapid price increase. However, users often cannot conduct transactions or withdraw cash.

IFCERT emphasized that fake cryptocurrencies have no value and are illegal, asserting that “Many of these platforms do not have business premises and business information, and servers are often deployed overseas,” so it will be difficult to recoup any losses for victims.

271 Fake ICOs

On Thursday, the Wall Street Journal independently published its finding after a review of documents produced for 1,450 initial coin offerings (ICOs). The publication “has found 271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.”

Investors have poured more than $1 billion into these 271 ICOs, the publication detailed, adding that “some of the firms are still raising funds, while others have shut down. Investors have so far claimed losses of up to $273 million in these projects, according to lawsuits and regulatory actions.”

Do you think there are many more fake cryptocurrencies? Let us know in the comments section below.


Images courtesy of Shutterstock and IFCERT.


Need to calculate your bitcoin holdings? Check our tools section.

The post China Has Found 421 Fake Cryptocurrencies appeared first on Bitcoin News.

You may be interested

Capital One Seeks Blockchain Patent for ‘Collaborative’ Authentication Tool
Crypto News
Crypto News

Capital One Seeks Blockchain Patent for ‘Collaborative’ Authentication Tool

btcethereumadmin - August 17, 2018

U.S. banking giant Capital One is working on using blockchain technology to usher in more convenient and secure user authentication…

3 Charts Suggest Bitcoin Prices Could Be Headed Higher
Bitcoin
5 views
Bitcoin
5 views

3 Charts Suggest Bitcoin Prices Could Be Headed Higher

btcethereumadmin - August 17, 2018

For bitcoin (BTC), the path of least resistance is to the upside, according to technical charts. At press time, the…

JD.com Rolls Out Blockchain Platform With Its First App
Crypto News
1 views
Crypto News
1 views

JD.com Rolls Out Blockchain Platform With Its First App

btcethereumadmin - August 17, 2018

Chinese e-commerce giant JD.com has launched a blockchain-as-a-service platform alongside its first app – one that digitally tracks corporate invoices…

Leave a Comment

Your email address will not be published.