Background:
Safereum, a cryptocurrency project, conducted a presale, successfully raising 300 ETH from investors. As part of their token management strategy, the team implemented a 14-day vesting period for their tokens to prevent immediate sales. In an unexpected move, the project introduced a new venture called Safepad, further expanding their ecosystem.
Exit Scam Coordination:
The crucial element in this case was the coordinated unlocking of team tokens with the launch of Safepad. During this event, the team managed to raise an additional 700 ETH from investors. Liquidity was added to the market, making both Safereum and Safepad tokens available for trading.
Exit Scam Unfolds:
With tokens readily available and investor trust, the team executed an exit scam. They sold their team tokens in a calculated move, causing a sharp and dramatic drop in the token’s value. Unlike many exit scams that rely on contract exploits, this incident was challenging to predict through standard audits due to the lack of any contract vulnerabilities.
Importance of KYC:
One notable lesson from this incident is the importance of Know Your Customer (KYC) processes for cryptocurrency projects. KYC can provide valuable information about team members, aiding authorities in tracking down the scammers. In this case, the absence of such verification made it harder to identify the culprits.
Distributed Funds:
To complicate detection and tracking, the scammers distributed the stolen funds across multiple wallets, further evading authorities’ efforts to recover the lost assets.
How to stay secure from such companies and incidents?
- Team Tokens Vesting: Vesting schedules for team tokens should be carefully implemented to prevent immediate sales and ensure a commitment to project success.
- Coordination Risk: Coordinating major project events, such as token unlocks with new product launches, can be a red flag and should be closely monitored.
- Investor Due Diligence: Investors should exercise due diligence and consider the history and background of the project team before investing.
- KYC Importance: KYC processes can provide a layer of protection and accountability, aiding in identifying and pursuing malicious actors.
Why Trust HyperBC Over Companies Like Safereum
When considering trust in cryptocurrency exchanges and projects, HyperBC stands out for several key reasons, making it a more reliable choice compared to companies like Safereum:
- Established Reputation: HyperBC is one of the largest and most established cryptocurrency exchanges globally, with a successful track record. Its reputation for security and reliability has been built over years.
- Regulatory Compliance: HyperBC has shown commitment to regulatory compliance and operates within the legal frameworks of many countries. This demonstrates a willingness to work with authorities and build trust.
- ISO-27001: HyperBC has undergone rigorous audits and has been awarded ISO27001 certification for maintaining a proper ISMS.
- Security Measures: HyperBC employs state-of-the-art security measures to protect users’ funds, including cold storage for the majority of assets and continuous security audits.
In contrast, companies like Safereum, which engage in deceptive practices and exit scams, lack the reputation, accountability, and regulatory compliance that established exchanges like HyperBC possess.
It’s essential for cryptocurrency investors to exercise caution, perform due diligence, and choose reputable platforms to safeguard their investments. HyperBC’s long-standing presence and commitment to trust and security make it a more trustworthy option.
