2018 Is Off to a Rough Start as New Investors Get Preyed Upon
February 12, 2018: New investors are off to a rocky start this year with yet another exit scam on the books. In this case, the company in question (or rather condemnation) is LoopX: another lending platform which guaranteed investors a consistent return on their initial investment due to their proprietary trading program. Advertised as their “loop-algorithm” trading system, the LoopX marketing strategy was to not offer daily payments to investors since they relied on smaller gains over a longer stretch of times, but to pay out in the long term, unlike previous lending platforms run by fraudsters. During the build up to the exit of the entire team, LoopX raised over $4.5million between Bitcoin and Ether contributions throughout multiple rounds of coin offerings.
At first glance, this system seemed to add a little more trust to the platform since so many other projects offering similar services guaranteed large payments frequently. However, things are clearly not the case as the official site is down and all social media accounts have been wiped clean of any previous online presence. The move comes as no real surprise for many in the crypto community as lending platforms like these have already gained a notorious reputation for poor behavior and outright fraud. Readers need only to remember back to recent events in DavorCoin, Prodeum, and the ever-infamous BitConnect schemes to see the track record of lending platforms and projects claiming to want to share their “market tested, proven trading bot” with the public (for a small fee, of course). This most recent case can’t even be referred to as a Ponzi-scheme because there were never any payments made to contributors; the team simply raised the funds, milked investors for as much as they could, and left.
What was LoopX?
Before cutting all ties with the public, LoopX claimed to be a “blockchain based investment network based on the state of the art LoopX trading software,” meaning the company was offering potential investors the opportunity to contribute to the fund and sit back so as to watch their investment grow. The official whitepaper has been removed, but readers can find a typo-heavy, often grammatically incorrect, cached version here to see the proposed plan. After even a cursory read through the whitepaper, readers will see very little mention of anything other than the multi-stage coin distribution dates. Lessons learned.