It doesn’t come as a surprise any longer when exchanges are hacked, or owners an ICO or blockchain project decide to pull a fast one on investors. The cryptocurrency industry is still loosely regulated and there is still a level of anonymity in the space.
From popular exit scams of Ponzi schemes like Bitconnect to high profile hacks like the very recent CoinCheck, there is no arguing the fact that the world of digital assets is a wild west. This time around, it has been alleged that the CEO of Sky Mining has eloped with investor funds.
According to a news like local media outlet, VNExpress, the CEO of Sky Mining, a Vietnamese crypto mining firm, Le Minh Tam has run away with assets belonging to investors, as well as the company’s funds. Assets worth around $35 million has allegedly been stolen by Mr. Tam.
VNExpress reports that Tam has gone into hiding for up to a week now, and had carefully perfected plans to clean out the company’s assets. He came on Facebook to apologize for his actions, blaming the company’s non-profitability, as a result of the volatile and downward market in the last few months.
Although Tam had instructed investors to visit the company’s office in order to collect their capital, after which he will proceed to declare the firm bankrupt, investors who went to Sky Mining’s headquarters were shocked to see a closed building with no signage.
Also, a separate facility housing the firm’s 600 mining hardware was reported to be empty, as individuals who claimed to be “maintenance workers” were moving things out of the facility.
The deputy chairman of the mining firm, Le Minh Hieu has set up a board to look into the losses of investors, as well as take stock on what is left of the company. He noted that he cannot fully report on the extent of the losses since Tam was in charge of mining rigs. Hieu believes that Tam is headed for the US, adding that:
“[We have] reported this to the police and showed evidence that we are not guilty. We are victims too.”
Twenty investors out of those affected have proceeded to file a complaint with the local police.
Heists like these make it harder for cryptocurrencies to gain wide-scale adoption. As an investor, I will definitely be skeptical about investing in an opportunity, knowing full well that I could wake up one morning and all my funds are gone, with no hope of refunds. This also points to the need for stricter regulations within the cryptocurrency space.
In Vietnam for example, authorities have placed a ban on local companies participating in crypto-related activities. The country’s central bank has also earlier in July voiced their support for the ban on crypto mining hardware.
The take home is all of these is that as an investor and cryptocurrency enthusiast, “all that glitters is not gold”. Only invest what you can afford to lose.