Savedroid’s ‘Exit Scam’: Lessons Learned

noahniuwa (25)in #ico • 7 years ago (edited)

An Ugly Shock:

“AANND IT’S GONE.” - These were the words, accompanied by an image from the popular cartoon show South Park, which greeted investors in the German ICO Savedroid on the morning of April 18th, 2018 when they loaded the project’s homepage. All links and other information about the project had been scrubbed from the page. Worried about a possible hack, investors rushed to Twitter, looking for assurance from the project’s CEO, Yassin Hankir. Unfortunately, what they found was not very reassuring. Yassin had posted a single tweet reading, “Thanks guys! Over and out ... #savedroidICO”. The tweet also included a selfie of Yassin giving a thumbs up, and a beachside photo of what seemed to be his hand holding a beer. A video posted to YouTube showed the Savedroid office emptied of all staff. Admin had disappeared from the project’s Telegram chat group, and no one associated with the project was reachable. Investors, who had jointly sunk more than 50 million dollars worth of cryptocurrency into the project, were understandably enraged. Some began to try and track down Yassin from the photos he posted on Twitter. The location was determined to be somewhere in Egypt. Major cryptocurrency news outlets like CoinTelegraph and Yahoo Finance reported the event as a probable exit scam. Things looked grim. Fortunately for investors, the whole thing turned out to be a badly misguided publicity stunt, as Yassin sheepishly revealed the following day in an amateurish YouTube video. The company’s CEO explained that the purpose of the stunt was “to convey a very serious message” about the issue of scams in the ICO industry. He went on to stress the need for regulation and investor protections.

Scams – A Real Issue:

It’s true that scams are a serious issue in the world of ICOs. Investors in a variety of different ICOs have been swindled out of millions of dollars through exit scams and ponzi schemes. Furthermore, since the regulatory environment is quite unclear right now, there is very little in the way of protection for investors. This problem is further compounded by the fact that the true identities of the people behind some of these projects are hidden or fabricated (such as in the cases of the Symmetry.fund and Benebit scams), and it is up to the due diligence of each individual investor to ensure that the projects they invest in are really what they purport to be.

Takeaways:

While it is important to raise awareness about the danger of scams, Savedroid’s actions have perhaps done even more to raise awareness about the importance of a competent marketing strategy for an ICO! A stunt such as this one which plays with the trust of investors would never have been allowed to happen under the leadership of a competent marketing professional. More than anything, this incident highlights the need to involve experienced, competent advisors in the development of an ICO’s marketing strategy.