After raising $4.5 million in a series of initial coin offerings (ICOs), cryptocurrency start-up LoopX has disappeared — along with the cash that investors provided — in what appears to be the most recent exit scam to plague the cryptocurrency community.
Once a company with an active online presence, LoopX has entirely disappeared from the internet. The company’s website is no longer online and its social media accounts, including Facebook, Twitter, YouTube, and Telegram, have been deleted.
The founders of LoopX told early backers that their team had been building an investment platform that would utilize a proprietary trading algorithm. According to a cached version of the company’s website, it planned to offer the “most advanced loop trading software to date.” A quote from the defunct website read as follows: “After testing our algorithm thoroughly over half a year with great profits continuously every month, we can now finally bring all this advantages of our LoopX – Trading Software to the public.”
LoopX made a number of bold claims to investors, including the promise of “guaranteed profits every week” and “great profits continuously every month.” The company also claimed that cryptocurrency markets were “projected to grow up to 10 times the size of now until the next year.”
The company’s white paper — which, unsurprisingly, has also been scrubbed from the internet — offered similar language. “Finally the opportunity is here for the common investor to be part of a revolution and be finally free, financially free… Our top priority is to give you an opportunity to sit back, let us do the work and watch your money grow.”
“Our software handles over 10,000 trades per second and calculates over 100 currencies at a time,” the LoopX website read. “Always looking for those opportunities to make profits bigger then 10 percent, which will payed out to our members on a weekly basis.”
Off the backs of all these promises, the company raised about $4.5 million, including 276 Bitcoin and 2,446 Ethereum. In hindsight, it’s surprising that investors put so much faith into a company that was using a lot of incorrect language and grammar — something not indicative of a “core group of high performance professionals” that LoopX was apparently formed around.
In an ICO, an investor is given a token in exchange for an investment of cash or another cryptocurrency. The idea is that if a company is successful, the token will gain value over time and the investor will eventually be able to bring-in major returns. For more information about ICOs, check out our article The Biggest Threat to an ICO and How to Avoid It.
In the case of LoopX, it appears the money put forth by investors is gone, along with the company itself in what appears to be a classic exit scam — a con job where a company accepts money for a service that it never intends on providing.