World’s First IEO Exit Scam? Yescoin（YES）Disappears with Tens of Millions of Chinese Yuan in IEO Earnings
As the initial exchange offering(IEO) has been gaining much traction with cryptocurrency investors, scammers have found ways to make IEO their new source of defrauding unsuspecting people. The first IEO exit scam has recently emerged in China.
The team behind the fraudulent crypto project dubbed Yescoin(YES), a so-called digital asset auction and trading platform, seems to run away with investors’ money roughly two weeks after raising funds through IEO, according to Chinese blockchain-focused media outlet Yiben Blockchain.
As per the project’s white paper, Yescoin, which aims to create a unique auction model which is said to enable investors to buy mainstream cryptos such as Bitcoin(BTC) and Ether (ETH) at far-below-market prices. Yescoin can profit from the practice.
Users had to buy the platform’s Point with USDT first if they want to participate in crypto auctions. The Point entitled a holder to receive 1 YES, the native token of the digital asset trading platform, and one Point was worth 0.1 USDT.
Just like many other exchange tokens, YES holders can get dividends, and 95% of the platform’s earning will be returned to investors, the white paper said.
The platform raised tens of millions of yuan through three rounds of IEO which started on April 9, and distributed platform tokens to Points holders. In the wake of the IEO, YES was immediately listed on the exchange and its price surged nearly 1000% to an all time high on the first trading day .
A YES investor, known as Lyu Hao, told Yiben Blockchain that the platform suspended the YES/USDT trading pair on April 14 just 2 hours after opening the trading pair, leaving investors unable to withdraw cryptos. “ Data of daily dividend is not updated any more.” Lyu said. Further, the official website of the project has been shut down and Telegram group members are blocked from sending messages.
Scammed retail investors found it even used non-famous-person stock photos to illustrate team members who don’t actually exist. One anonymous investor disclosed that more than 90 percent of digital assets that the platform raised through IEO have been transferred to other trading platforms, and the team appears to disappear.
YES dropped to $0.0001 yesterday from the peak of $0.085 on April 19, according to Yiben Blockchain.