South Korean cryptocurrency exchange firm Upbit has uncovered and reported about 20 cases of fraudulent Initial Coin Offerings (ICO), Finance Magnates reported. This is after the firm has announced to give out a reward by as much as KRW 1 million (US$940,000) for any individual or enterprise with legitimate information leading to bust out any ICO endeavor with the potential to commit exit scams.
One of these fraudulent ICOs went as far as impersonating agents from the Seoul Metropolitan Police Agency and ask ransom for cryptocurrency-related activities. Impersonating authorities with known power to verify actual legitimate ICO endeavors is becoming the trending scamming approach in soliciting investments for ICO.
Apparently, this is the same tactic used by individuals that tried to bank on the blockchain platform that Korean tech start-up Kakao has recently launched. This is included among the fake ICO endeavors that got reported to Upbit.
For starters, Kakao Corporation itself denied any on going ICO related to proliferating any information for its own cryptocurrency exchange token, the Kakao Coin, according to Kakao’s CEO, Joh Su-yong. With ICO banned in South Korea, Kakao can instead leverage its status as South Korea’s top mobile messenger operator to corner a larger slice of the blockchain technology pie.
With the help of its top-selling messenger app, KakaoTalk, it acknowledged a potential to expand their foothold in Southeast Asia upon adopting the blockchain technology. And through its subsidiary, Upbit, it will also learn which crypto trading platform is feasible and which ICO endeavors are at risk at devolving into an exit scam. This aspects gave Kakao reason to hold out any attempts for an official ICO.
In case Kakao would eventually dip it big toe in the massive pond of ICO online, it can rake in the profits in the same way that messenger app Telegram did. Said app has capitalized on the rise of investing in cryptocurrency to increase its user base, mostly blockchain enthusiasts with serious researching skills to tell the legitimate ICO from the fake ones. So when they eventually launched their own ICO, Telegram was reported to gain about a billion US dollars from its first fund-raising endeavor.