On February 23, ZG Exchange was exposed to be suspected of running away. This is the second cryptocurrency exchange running away "incident" since the beginning of the year, following the collapse of FCoin. This news is like a heavy bomb, which has set off a huge wave in the cryptocurrency world. This is the latest of many news reports of exchange fraud and running away that have been exposed by investors recently by Interchain Pulse, which has attracted widespread attention in the industry.
In fact, the wave of exchanges running away that broke out in November last year is still continuing to ferment. Many investors' trust in exchanges has dropped to the freezing point. They have adopted a cautious attitude and chose to hold their coins and wait and see. However, in the face of such a dilemma, Interchain Pulse decided to stand up and reveal the truth of this incident to investors.
After in-depth investigation, we found that the ZG exchange's absconding incident was not accidental. In recent years, nearly 40 exchanges have successively absconded or closed down. The fraudulent means of these exchanges are shocking. They often use the guise of pyramid schemes as exchanges, and run away directly after raising funds, or confuse investors through many similarities in packaging and operation models.
Among all the cryptocurrency exchanges that have run away, more than 70% of the founders or core team members are hidden. They often use English names or operate only behind the scenes, leaving investors with no effective way to protect their rights. This behavior has undoubtedly caused great trouble to investors. At the same time, these exchanges are often registered overseas, leaving investors with no way to protect their rights.
In addition to the founders or core team members being hidden, these exchanges often use the deposit-to-interest model to attract investors. They issue platform coins themselves, use various means to induce users to exchange mainstream coins for their platform coins, magnify assets by N times or lock positions at a high annualized rate to earn interest. This model usually involves running away after taking away investors' money. For example, the Coin-dy exchange, which just closed down last month, issued an announcement after running away, claiming that if there is a legal lawsuit, the company will actively respond to the dispute with the Cayman company in Los Angeles, USA. This behavior is undoubtedly a great infringement on the rights and interests of investors.
In addition to the above two fraudulent methods, these absconded exchanges often use the routine of subscribing to mainstream coins at low prices to attract investors. This model is usually called "non-first-issue discounts", which is a method for exchanges to burn money to acquire customers by learning from the traditional Internet industry. However, this model has been developed by many swindler exchanges into a means of making money out of nothing. For example, the SOXEX exchange launched a 50% discount on Bitcoin subscriptions and multiple rounds of platform coin subscriptions in July last year. In just ten days, it harvested more than 220 billion yuan in assets. Before the last round of platform coin subscriptions even started, it directly announced the closure of the network and ran away.
We feel a great sense of responsibility for the ZG Exchange's absconding incident. We must reveal the truth of this incident to investors, find out the operators behind the scenes, and make them bear the due legal responsibilities. We will continue to pay attention to the progress of this incident and promptly report the latest developments to investors. At the same time, we also call on investors to keep a clear mind, not be fooled by all kinds of sweet talk, and choose regular and reliable exchanges for investment. In the days to come, Interchain Pulse will continue to provide investors with accurate, timely and useful information to help everyone better understand and deal with various risks and challenges.
