Every day you hear more stories about whacky initial coin offerings (ICO) that go pear shaped. This can come about in a variety of different forms, whether it is simply due to the incompetence of the operators in questions or perhaps it is even outright fraud. According to a recent report, more than 80% of ICOs are said to be fraudulent in nature
This is why there has been a strong crackdown by the authorities on these offerings, with the likes of South Korea and China completely banning them from taking place on their shores. Investors need to be protected and ensure that they do their own due diligence at the same time.
Now there is an ICO that is operated by a treasure hunting firm in South Korea called the Shinil Group that is being investigated for alleged fraud.
What is the background to the story?
The Shinil Group first started to get media attention after they made the announcement that they would be holding their own ICO after they had made a significant discovery. This was a Russian battleship that had been sunk with gold worth in the region of $130 billion on board.
It was on the 16th of July that the firm uploaded a YouTube video which allegedly showed the method in which they found the ship in question that is named Dmitrii Donsoki. This boat had been scuttled back in 1905 during the Russo-Japanese War and this occurred nearby to Ulleungdo island. When it was sank, there was around 5,500 boxes filled with gold bars and golden coins that weighed up to 200 tons in total.
What are the allegations?
After the discovery was made, half of this gold was meant to be returned to Russia and 10% of it would aid tourism on the nearby island where it was discovered. However, the Shinil Group went on to sat that it would be used in the launching of their own ICO.
It was supposed to be for the Shinil Gold Coin token and was intended to begin on the 30th of July, with the coin to hit the exchanges in August and September. However, now there are allegations that it could in fact be a scam.
Industry authorities, researchers and regulators in South Korea have been expressing their doubts about this ICO in recent days. The Group had said they had been the only group in the globe to have found this shipwreck which is not true and there are even doubts as to whether they have in fact found this particular shipwreck due to previously uploaded footage which appeared to be another shipwreck. The Ministry of Maritime Affairs and Fisheries has also not received any information about the Shinil Group’s discovery and they have yet to receive an application for any salvage rights.