Confido collected $374,000 in an ‘initial coin offering,’ then it collapsed. The founders’ supposed employers say they never heard of them.
“Confido” means “I trust” in Italian. It’s also the name of a cryptocurrency company that vanished without a trace this weekend, taking $374,000 of investors’ money with it.
Confido appears to have been a bogus operation, run by fictional characters who fabricated their resumes. It’s the latest cryptocurrency to cut and run with investors’ money — and loose laws on cryptocurrency sales mean Confido won’t be the last cryptocurrency to scam its way to riches.
Confido tokens are a cryptocurrency, like BitCoin or Ethereum. Like a flood of upstart companies this year, Confido made its debut with a fundraising tactic called an initial coin offering, or ICO. For some cryptocurrency enthusiasts, an ICO is an opportunity to strike it rich by snapping up the next hot coin before its value increases.
ICOs are also a sweet deal for companies, who can rake in cash by selling tokens with no intrinsic value. That’s exactly what Confido did.
On its face, Confido looked like a trustworthy operation. Someone registered a website for Confido the last day of August, records show, and outfitted the site with friendly animated tutorial videos and biographies of four smiling men, whom Confido claimed were its employees.
Some prospective buyers were skeptical. “confido.io is not as good as 4chan thinks it is,” one forum poster wrote in October. Despite Confido only having 558 Twitter followers, the company regularly racked up hundreds of retweets, with no likes or comments: an indication that the company many have been buying retweets from bots, the writer speculated. “Because there is a shadow of a doubt, i cannot recommend joining their ico. you’ve been warned.”
But in early November, Confido started selling its tokens for less than a dollar each, leading to a rush of enthusiastic press.
“There is a potential for a 10x growth in token value after alpha launch. They have a good team,” one cryptocurrency blogger wrote a week after the launch. “Well worth a 6 month investment in my opinion.”
Investors shared the opinion and sank $374,000 into the cryptocurrency in two weeks. Then on Sunday, Confido announced that the project might have trouble.