Just kidding? Crypto-company Savedroid says exit scam was a prank

Posted: 20 April 2018 11:56 am

After disappearing with $50 million of investor money, the CEO says it was just a prank.

An exit scam is a relatively common part of the cryptocurrency world. It's when an ICO raises investor money, then simply disappears. These exit scams are responsible for a decent portion of the 10% of ICO funds that end up stolen.

But apparently getting bored with traditional exit scams, where a company simply disappears, various scammers have taken to taunting their victims on the way out the door. The Prodeum ICO might have been the first, simply changing its website to the word "penis" as it disappeared. Bitcoiin2Gen was another, with the CEO and Steven Seagal happily announcing that they would be taking the money and leaving, so the coin can develop organically without their intervention, just as nature intended.

And for a while, Savedroid looked like it was the most audacious one yet, disappearing after raising $50 million.

The Savedroid offices were emptied, the website was replaced with a picture saying "it's gone," and the CEO uploaded a photo of himself at the airport and at a seaside resort in Egypt, to Twitter saying "over and out."

Now he's assuring everyone that it was just a joke, or just an important message to highlight awareness of exit scams in the cryptocurrency community, depending on how charitable you're feeling.

Unsurprisingly, most people aren't happy with the hilarious prank. The kindest sentiment might be that the prank was ill-advised and probably didn't bolster investment confidence. The other side of the spectrum has people wondering whether the founder actually planned the exit scam, but backed off after receiving a surge of death threats and realising that he was being efficiently tracked down.

"I can't speculate as to his motives," said Adam Selene, who reported the supposed exit scam to German police and spearheaded efforts to track down the Savedroid CEO, "but I can answer the question of his outcome. The community has lost faith in Savedroid. [The CEO] has betrayed his investors. They entrusted him with $US50 million to go out and build a product and that’s imploded because of a poorly conceived publicity stunt. What it comes down to is that no one will trust him."

Others are speculating that it was intended to be an exit scam all along, but the scammer got cold feet.

"This idiot probably got calls from his friends and family and had his mother calling 'WHY ARE WE GETTING DEATH THREATS?' He realized his face was out there, so easily caught online, and decided to say 'SIKE, I'm just joking' with a quick cheap video made in 5 minutes to try to stop it," speculated one person on Reddit. There are also unconfirmed rumours that the exit scam prank led to at least two suicides.

It's not entirely clear how the Savedroid CEO managed to convince his team to go along with the absurd stunt, or why no one put their foot down. With a complete loss of investor confidence in the Savedroid team, the project might be unlikely to ever reach completion. But if nothing else it can serve as a case study in how groupthink can devastate a business, or a highlight in a compilation of history's biggest marketing disasters.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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