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Instruction: How to get your money back if you invested in a fraudulent ICO (SCAM)

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In the wake of kriptovalyutnogo HYIP hundreds have been held in the past few years, the ICO , and as time has shown, most of them did not bring the expected return to investors.

There are several reasons for this :

  • general decline in the cryptocurrency market,
  • inability of projects to find application for their products,
  • low qualification of the project team.

But, unfortunately, there are a lot of cases when the fundraising was initially focused on personal enrichment, and all the team’s activity comes down to creating an appearance of activity. In the latter case, there are all signs of fraud, which is regulated by our legislation, and, despite the gaps in the legislation in the blockchain field and cryptocurrency, in practice nothing prevents us from using the already existing laws to bring unfair citizens to justice.

Based on the practice of conducting an ICO, in most cases investors invest their savings in cryptocurrency in the ICO, then the question arises how to prove the value of what you invested.

In fact, in Russia there are already several cases of recognition by the courts of cryptocurrency as a digital asset. By and large, it does not matter what kind of property you have taken away: rubles, dollars, works of art or cryptocurrency – all this has its own value. You can determine the value in rubles, having data of the average rate at the time of investing your funds.

In practice, we are faced with the fact that some investors are afraid to show that they have some kind of savings in cryptocurrency. I want to dispel these concerns. Keeping and buying cryptocurrencies is by law no different from buying other currency or other assets, and you do not have to report to the tax until you derive income from this, it is your savings and no one has the right to take them from you.

What to do if the ICO project you invested in turned out to be a scam?

  • First you need to prepare documentary evidence of your participation in the ICO, these are tx transactions from your account to the project account, you can easily find them at the address of your wallet on https://etherscan.io or https://www.blockchain.com / explorer , then select the desired transaction.
  • Also, you will need all the information about the project itself, the official website, you can save screenshots from the website with the terms of ICO, white paper of the project, all available contact information, legal addresses, phone numbers, email addresses. It will also be useful to save the correspondence with the project team in any messengers and e-mail, screenshots of the personal account. In general, the more information the better.
  • The first thing you need to do is to write a complaint in free form to the electronic or postal address of the organization, or the person representing the project in Russia. In the letter you should describe the whole situation, when and how much you invested in the project, and demand a refund. You need to keep a copy of this appeal, and, if there is an answer, also save it. If you don't get an answer, it's not scary.
  • After that, you have two options: to file a lawsuit with the court, or to the law enforcement agencies with a statement on the fact of fraud. I must say, the option of going to court most likely will not bring results. More opportunities for the further course of the case you will have when contacting the Office of Economic Security and Anti-Corruption. Law enforcement agencies have a large set of tools for further investigation. When contacting law enforcement agencies, we recommend that you use the help of a lawyer to prevent various kinds of corruption situations.
  • To increase your chances, we recommend finding the same victims as you, because a group appeal has a better chance of success. I remind you that our NPO provides legal and information assistance in these matters. You need to write an appeal to the address indicated on the site.

In general, I would like to note that one does not need to be afraid of defending one’s rights, the blockchain has an undeniable advantage in that it stores data on all transactions made on the network, which simplifies the investigation of such cases.

Also now there are precedents for the return of funds and the criminal prosecution of unscrupulous ICO organizers, for example, the HOQU after returning to law enforcement agencies returned part of the funds received. A criminal case was also instituted against the organizers of the ICO Atlant, and the CEO was arrested.

At the moment, there are already lawyers in Russia specializing in cryptocurrency-related matters, all you need is to take the initiative to get your money back, because water does not flow under a reclining stone. But at the same time, soberly assess your losses so that it would not take more money and time to return the funds than you lost in the ICO itself.