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LoopX Startup Pulls ICO Exit Scam and Disappears with $4.5 Million (bleepingcomputer.com) 122

Posted by msmash from the stranger-things dept.
Catalin Cimpanu, writing for BleepingComputer: A cryptocurrency startup named LoopX has pulled an exit scam after collecting around $4.5 million from users during an ICO (Initial Coin Offering) held in the recent weeks. The LoopX team disappeared out of the blue at the start of the week when it took down its website and deleted its Facebook, Telegram, and YouTube channels without any explanation. People who invested in the startup are now tracking funds move from account to account in a BitcoinTalk forum thread, and banding together in the hopes of filing a class action lawsuit.
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LoopX Startup Pulls ICO Exit Scam and Disappears with $4.5 Million More

LoopX Startup Pulls ICO Exit Scam and Disappears with $4.5 Million

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  • Dumbasses (Score:5, Insightful)

    by registrations_suck ( 1075251 ) on Tuesday February 13, 2018 @03:32PM (#56117445)

    HA, HA!!

    • Good (Score:3, Insightful)

      by MrNJ ( 955045 )
      Stupidity should be painful

    • PT Barnum Was Right (Score:5, Insightful)

      by sycodon ( 149926 ) on Tuesday February 13, 2018 @03:47PM (#56117585)

      There is a reason the SEC exists...not that companies haven't pulled equally dishonest things under their watchful eye.

      • Re:PT Barnum Was Right (Score:5, Insightful)

        by rudy_wayne ( 414635 ) on Tuesday February 13, 2018 @04:15PM (#56117749)

        Funniest part of this is someone posted on Reddit a month ago that they had been digging into this company and found a lot of red flags.

        A fool and his not-really-money are soon parted.

      • Re:PT Barnum Was Right (Score:5, Insightful)

        by rahvin112 ( 446269 ) on Tuesday February 13, 2018 @04:43PM (#56117977)

        The SEC was created precisely to combat the fake company offering that quickly went out of business and kept all the money scam. The laws put in place to stop this are extensive including a massive amount of paperwork that ties the real people behind everything to the offering so if it turns out to be a scam the SEC can go after them and put them in prison.

        Maybe at some point the SEC will have charge of crypto-currencies, but the funny thing is the same people getting ripped off will be against SEC regulation because it will add paperwork to the process.

        At some point you just have to accept that a fool and their money will soon be parted. You would think with all the offerings that turned out to be scams that people would be cautious but that doesn't appear to be the case.

        • Re: (Score:1)

          by Anonymous Coward

          The SEC is pointless. They don't enforce insider trading regs (hint... look how CEOs short their stock right before they announce their company got hacked). Even Sarbanes-Oxley has been worthless, only nailing a fisherman who overfished his bag limit.

          I don't see this changing anytime soon. It would be nice to actually have some defense against overt stock manipulation. However, at least with cryptocurrencies, they are completely, and 100% secure against that ever happening. No pump/dump there, nosiree.

        • Re: (Score:1)

          by Anonymous Coward
          Fuck you. Make America Greedy Again(R).

        • People give money to already wealthy mega-churches and believe in Prosperity theology.

          Stupidity is everywhere, even amongst the wealthy.

        • Comment removed based on user account deletion
    • Wish I had mod points to mod you up.

    • Acronym Hilarity (Score:1, Informative)

      by TexasDiaz ( 4256139 )
      I was reading the forum, and just couldn't stop giggling at the acronyms that probably should have sent red flags everywhere. Coin Type: Proof of Stake (PoS) - Yeah, everyone now knows it was a PoS. Coin Abbreviation: LPX (also Louisiana Pacific stock exchange ID) - Yeah, everyone got railroaded. And their "proofen concept" definitely proved they had what it takes. Or they now have what they took. Schmucks.

      • Re: (Score:1)

        by Anonymous Coward

        Errr... Proof of Work (PoW), Proof of Stake (PoS), Proof of Authority (PoA) are pretty common terms related to blockchain authentication mechanisms. Not exactly the hidden flag you seem to imagine.

    • Please let this be the one that Salon.com has started using!

  • Can I get a list of the people who invested? (Score:5, Funny)

    by xxxJonBoyxxx ( 565205 ) on Tuesday February 13, 2018 @03:32PM (#56117449)
    >> People who invested in the startup are now tracking funds move from account to account in a BitcoinTalk forum thread, and banding together in the hopes of filing a class action lawsuit

    Would it be possible to get a list of the rubes who invested into this "initial coin offering"? (Because I have a few more things I'd like to sell them, starting with the Brooklyn Bridge.)
    • What? That is a very valuable information, worth far more than the 4.5 million they stole.

      List of confirmed rubes that are known to be gullible, is so valuable man. The scammers of the world would pay top dollar for the list. You don't stand a chance.

    • Re:Can I get a list of the people who invested? (Score:5, Funny)

      by Jason Levine ( 196982 ) on Tuesday February 13, 2018 @04:42PM (#56117967) Homepage

      Don't call it the "Brooklyn Bridge." Call it the "Blockchain Bridge" and you'll get millions from investors.

      • Re: (Score:1)

        by Anonymous Coward

        Reminds me of the dot com jokes going around in 2000

        Three beggars are begging in New York City. The first one wrote "beg" on his broken steel cup. After one day he had received ten bucks.

        The second one wrote "beg.com" on his cup. After one day he had received hundreds of thousand of dollars. Someone even wanted to take him to NASDAQ.

        The third one wrote "eBeg" on his cup. Both IBM and HP sent vice-presidents to talk to him about a strategic alliance and offered him free hardware and professional consulting.

      • Comment removed based on user account deletion

    • Funny too that they are considering a class action lawsuit against an entity with no continuing legal presence. The appropriate mechanism is criminal charges on the individuals involved.

      But yes, a fool and their money are soon parted. Pay some country's money for cryptocurrency, or set it on fire, the result is the same.

  • Darn (Score:3, Funny)

    by 110010001000 ( 697113 ) on Tuesday February 13, 2018 @03:34PM (#56117463) Homepage Journal
    This is bad. I bought into the offering. Is it possible to get my money back? I want to get in the lawsuit too.

    • Re:Darn (Score:5, Funny)

      by Anonymous Coward on Tuesday February 13, 2018 @03:40PM (#56117529)

      I can help you with that. First, we need a retainer for a lawyer. You can pay with VillLoseX coins. There will be a ICO soon. Buy all you can. Then when we win a trillion dollars they will be paid out in Fakerium coins. You'll need to buy some of those to set up an account. As you know, sometimes people will take all the real money you used to buy fake money, so I highly suggest buying a substantial amount of WorthlessCoin in case one of your other accounts is compromised. Whatever you do, keep buying XCoins!

      • You can pay with VillLoseX coins. There will be a ICO soon. Buy all you can. Then when we win a trillion dollars they will be paid out in Fakerium coins.

        I haven't laughed this hard in weeks.

      • I can help you with that. First, we need a retainer for a lawyer. You can pay with VillLoseX coins. There will be a ICO soon. Buy all you can. Then when we win a trillion dollars they will be paid out in Fakerium coins. You'll need to buy some of those to set up an account. As you know, sometimes people will take all the real money you used to buy fake money, so I highly suggest buying a substantial amount of WorthlessCoin in case one of your other accounts is compromised. Whatever you do, keep buying XCoins!

        Ah shit. Meant to +1 funny, accidentally -1 overrated, had to post to remove the negative mod point.

        If it makes you feel more karmic, 6 other people are losing a +1 in here to offset it.

    • Is it possible to get my money back?

      It's a good time to review the definitions of "real" and "virtual" at this point.

      If you can see it, and it's there . . . it's real.

      If you can see it, and it's not there . . . it's virtual.

      If you can't see it, and it's not there . . . it's gone.

      These financial fumblers will get their lawsuit . . . but their money is long gone.

    • You gave someone your money for imaginary things. You still have your imagination, so any loss that you have incurred is a failure of your imagination.

  • Nobody listens (Score:3)

    by Khyber ( 864651 ) <techkitsune@gmail.com> on Tuesday February 13, 2018 @03:36PM (#56117491) Homepage Journal

    Those of us with brains warned them about the scam. They didn't listen. Perhaps I could sour their lawsuit by demonstrating that they were given fair warning to NOT invest.

  • Link to BitcoinTalk forum (Score:5, Informative)

    by xxxJonBoyxxx ( 565205 ) on Tuesday February 13, 2018 @03:40PM (#56117527)
    Here's the link to the BitcoinTalk forum our useless editors failed to provide:
    https://bitcointalk.org/index.php?topic=2521307.0

    I have to admit: it IS pretty funny!

  • ICOs (Score:5, Informative)

    by sexconker ( 1179573 ) on Tuesday February 13, 2018 @03:42PM (#56117549)

    Every single ICO is a scam. You're investing money into a a shitty alt coin or a shitty fake coin running on a shitty alt coin (Ethereum), with the promise that you can take the shitty alt coin or shitty fake coin and resell it to some other investor later down the line, exchange it for a decent coin, and then exchange it for regular currency.

    There's not even the pretense of investing in an actual platform or currency, you're investing on a do-nothing proxy built on top of one, and you're subject to the dangers of both.

    If the person running the ICO bolts, you're screwed.
    If the person running the ICO somehow isn't an outright scammer, but nonetheless fails to get their honest attempt at a project off the ground and into profitability, you're screwed.
    If the crypto currency the ICO is pegged to declines in value, the ICO itself has just declined in value (they keep their coins in the blockchain as a sign of good faith to potential investors - until they abscond / quit).
    If the crypto currency the ICO is pegged to increases in value, you've lost out on that increase since you traded one type of coin for a proxy running on top of it.
    If the ICO's coin never gets picked up by a major exchange, you won't every be able to profit from it even if you're way up on paper.
    If the ICO's coin or the crypto currency the ICO is pegged to get banned by governments, exchanges, or payment processors, you're screwed.

    • Re: (Score:2)

      by asylumx ( 881307 )
      You're exactly right, except you called in 'investing' -- Most would call it 'speculating' at best.

      • Re:ICOs (Score:5, Insightful)

        by swb ( 14022 ) on Tuesday February 13, 2018 @04:12PM (#56117721)

        Speculating seems too legitimate.

        This is like a self-aware group Ponzi scheme where everyone thinks they're early enough in the Ponzi to be one of the people who gets paid off.

    • Re: (Score:1)

      by elcor ( 4519045 )
      Most are scams, not all. For example there is this german company that makes deployable miners, and this AI company in taiwan.

    • "But if all of that doesn't happen and the virtual currency takes off, I'll be a multi-millionaire!" - People who invest in ICO's despite repeated warnings.

    • Most of your points are true for an IPO, too.

  • The only good ICO's are the ones that give a fixed group of people coins as an initial air-drop to bootstrap the ecosystem. Hold onto those "free" coins until they have value and the coin is tested for reliability. Once you feel comfortable with it a year or two later, then you can begin investing. Did this for Decred... no regrets.

  • Unregulated Gambling strikes again. (Score:3)

    by Mr307 ( 49185 ) on Tuesday February 13, 2018 @03:46PM (#56117573)

    Now this will of course push some activity back towards Bitcoin, but that 'coin' is completely useless for its stated purpose and is doomed to fail long term.

  • Predictable (Score:1, Insightful)

    by Anonymous Coward

    Seriously, how utterly, bafflingly, astonishingly, utterly astronomically dumb are you people? Everything about cryptocurrency is a total scam. EVERYTHING. Anyone who has had even glancing experience with investing could have seen the warning signs from a million miles away. The best part for me is how it has primarily affected "techno-libertarians". In 100 years this will all be the primary example used when people talk about the dunning-kruger effect.

    Cue the replies claiming they made money so it must

  • Into the Black (Score:3)

    by nsuccorso ( 41169 ) on Tuesday February 13, 2018 @03:50PM (#56117613)
    Things typically *appear* out of the blue. It would be more appropriate to say they disappeared into the black, if an idiom of that sort were necessary.
    At least the summary doesn't state that investors are "back at ground zero"!

  • A fool and his money ... (Score:2)

    by Anonymous Coward

    This is getting hilarious.

    You wanted an unregulated currency, you got one.

    The things people have always said in support of cryptocurrency always rang like "we totally want an environment where people can rip you off because it's free from interference from the gummint".

    This is what that looks like.

    This is why regulations in the first place, because people are lying, cheating bastards and someone will always do this kind of stuff.

    Hell, that financial meltdown in 2008? Companies knowingly packaged together j

  • As my mom would say to me when I make a mistake in my homework . . . .

    'Oh, Fiddle Sticks!!!!'

    That's what I say to you all who put in CC into something that exists only in bits glowing on a boob tooob:

    Fiddle Sticks to you all!

  • "About LoopX" (from the website) (Score:3)

    by neilo_1701D ( 2765337 ) on Tuesday February 13, 2018 @04:35PM (#56117917)

    The LoopX Team was formed in September 2016 of a core group of high performance professionals to build a new kind of trading software based on our own Loop-Algorithm. After testing our algorithm thoroughly over half a year with great profits continuously every month, we can now finally bring all this advantages of our LoopX – Trading Software to the public. We are here to help you make money in the emerging market of cryptocurrencies which is projected to grow up to 10 times the size of now until the next year. The LoopX System gives you guaranteed profits every week thanks to the most advanced Trading Software out there to date! We do not make daily payments since we consider that the margins are smaller. For us the priority is the safety of your investment. It took us little bit over a year to bring you the final product so you can benefit from the most advanced technology too.

    This is from Bing's cached page of their website.

    So honestly, if you read After testing our algorithm thoroughly over half a year with great profits continuously every month and didn't fall over laughing at the obvious Ponzi nature of the scheme, you kind of deserved what happened to you.

    • This is from Bing's cached page of their website.

      So honestly, if you read After testing our algorithm thoroughly over half a year with great profits continuously every month and didn't fall over laughing at the obvious Ponzi nature of the scheme, you kind of deserved what happened to you.

      More to the point, if you have a system to guarantee profits you shut up and make money and don’t let anyone in. It’s like people who advertise a surefire way to make money in the stockmarket, the way to do that is to sell suckers your “system” and pocket their money.

  • Why did they get rid of their website and all of their accounts? What is the point in that? You're basically just telling everyone that you scammed them. Wouldn't it make more sense to just walk away and leave everything up, keep them guessing for a little while?

    • Why did they get rid of their website and all of their accounts?

      Because leaving the website up with a single word displayed had already been done?

  • There are _tons_ of stock and other investing scams that get carried out under the eyes of financial regulatory agencies...but you can bet there would be tons more if there were no regulation. You have to admit it's pretty brazen to just disappear with investors' money, not even pulling a Mt. Gox and claiming they were "hacked."

    I would imagine that most of the "investors" in this ICO either had tons of play-money Bitcoins they didn't care about losing, or were starry-eyed latecomers drawn in by the Bitcoin

  • They shouldn't be hard to find, they will be driving this https://pbs.twimg.com/media/DV... [twimg.com]
  • Just a reminder, the other 99% of crypto enthusiasts know that all ICOs are scams. It's been called kickstarter with less accountability. Stupid people will throw their money away somehow, this is just how they chose.

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