It what’s looking more and more like the crypto community’s next high-profile catastrophe, the Confido (CFD) project has utterly imploded – and for now the verdict’s still out on whether this implosion was intentional or not.
This devastating fall from grace is a definite gut check for the space, as investors flocked to the token in recent days as excitement grew after the CFD ICO ended.
Let’s bring you up to speed. This is one we’ll all be talking about for years to come.
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To start: what was Confido?
A link to the Confido website would be useful here, but the team has taken the site off the web as of Monday morning, November 20th, showing just how rapidly the situation has devolved.
The Confido website as of this morning
To that end, Confido was at least marketed an escrow and delivery tracking crypto project. CFD tokens would be used to operate smart contracts that were – in theory – going to be used to protect consumers from non-deliveries, damaged delivered goods, etc.
The smart contracts were to be set up in such a way that users would have up to 24 hours after a delivery to submit a dispute. At that point, the smart contract would release the consumer’s money back to them.
Neat idea – then what happened?
Well the whole idea really took off at first – particularly because CFD targeted a practical use-case combined with an extremely low circulating token supply (9 million) and an extremely low ICO target of $375,000 USD.
This trifecta of elements made investors get excited by potential exponential gains. For 11 days after Confido’s ICO, the project got listed on Binance, KuCoin Exchange, and other exchanges, quickly gaining in populary and rising to the top of November’s buzziest cryptos.
Then, the CFD team dropped a bombshell announcement.
Alleged “legal problems” derail project
In a since deleted announcement published Sunday, November 19th, Confido’s devs made a stunning revelation: the project was in dire straits legally.
Stakeholders were shocked.
The team explained the debacle resulted from an apparent oversight in an important contract:
“Right now, we are in a tight spot, as we are having legal trouble caused by a contract we signed. We signed the contract with assurance from our legal advisor that there was minimal risk and it would not be an issue […] I can’t and won’t go into details, but he was wrong. It is a problem.”
Announcement of “Legal Issues”. Source – Trustnodes
Within minutes Confido’s price began to plummet. Over the course of Sunday afternoon, CFD’s price dropped 85 percent to around $0.10 each.
After rallying upwards of $.20 overnight, the price has bled once more down to $.03 on Monday morning as horrified investors woke up to see all Confido’s social media and web presences had been erased.
Rage, confusion sets it
As you can imagine, the online crypto forums are brimming with disturbed investors calling Confido a clear exit scam.
While it remains to be seen what’s actually happened, things certainly look beyond ugly for now.
The project’s leaders, like Confido CEO Joost van Doorn, were apparently operating under fake identities.
Only time will tell what happens next.
But whatever happens, this Confido debacle is a reputational blow to the space as a whole and a reminder that investors will continue to get burned so long as scammers continue to penetrate into, and take advantage of, the ICO craze.
Featured Image via Fotolia
