In this Crypto Scam Spotlight, we shed light on Giza, the most recent ICO scam in the crypto industry, and the Bee Token phishing Scam. These two scams have cost investors a whopping $3 million in total and they may have the same scammers behind it all.
Investing in ICOs or initial coin offerings can be very risky for investors as scammers have found them to be an avenue for quick cash. An initial coin offering is much like an initial public offering except it deals with cryptocurrencies instead of corporate stocks. Developers hold ICOs to raise digital currencies to fund their start-up ventures. They propose projects and the investors who believe in them will fund them in exchange of tokens.
The Giza ICO Scam
The Giza Device
What did Giza have to offer? The Giza Device—a so called revolutionary hardware wallet. Investors bought Giza tokens to raise funds for the Giza device with the promise that they would have a percentage of the sales revenue. In Giza’s Telegram group chat, the company’s community manager mentioned that a contribution of $10,000 would land investors a free Giza device and a $5,000 would give them a 50% discount.
Image from the Giza Device website
To create the devices, Giza sought the services of Russian based company Third Pin LLC and they signed a $1.5M contract. But Third Pin LLC CEO Ivan Larionov later announced on a Bitcoin forum that it had cut ties from Giza following vague instructions and an offer to set up a new company outside Russia.
Investors started getting suspicious when this happened.
ETH Inflows and Outflows
Many were impressed with the Giza device and they truly believed the project was going to be a game changer. Around 2,100 ETH was raised to fund the project.
The digital wallet that people used to send their contributions for Giza was found to show Ethreum (ETH) outflows in mid-February. Out of the over $2 million raised for the project, only $17 remains. Some of ETH was coursed through cryptocurrency exchange ShapeShift. The company says it has then blacklisted the wallets Giza used to transact with them.
The Bee Token Phishing Scam
Unlike Giza, Bee Token is a legitimate company. The decentralized home sharing network held their ICO on January 31, 2018 and in just over a day, they and their investors (or would-be investors) were robbed of around $928,000!
Scammers used @thebeetoken.com email addresses and pretended to be operators of the company. They emailed potential investors and sent them ETH addresses to which to send their investments.
The Giza and Bee Token Connection
Using Etherscan.io, a website that allows you to see the transactions of a particular address on the ETH blockchain, it was discovered that one of the wallets involved in the Bee Token phishing scam sent ETH to one of the wallets associated to Giza.
This means that whoever was involved with the Bee Token phishing scam might be the same scammers involved with the Giza scam or they could at least be in the same group.
Do you think both scams have the same mastermind behind them? How can people avoid falling for these scams? Comment your thoughts below!