FOIN token price has tanked from over $3,000 to lows of around $6 in the past few days, as the firm backing it seems to be performing an exit scam.
FOIN token crashes hard
This scenario is happening right now, as the unregulated fintech company Financial.org has closed down, crashing the value for investors in blockchain startup Foin, which turned out to be related to the Financial.org scheme. Thus, both ICO buyers and other investors in the FOIN asset were left without their coins, despite promises they would be unlocked for trading very soon.
To add insult to injury, the Foin project was communicating until the last, promising to add merchants and unroll a payment system. The FOIN token price flew high, doubling its price in December, peaking just before what looks like a classic exit scam.
The Financial.org site remains unresponsive, finally ending months of doubts over the legitimacy of the project. The way this scheme managed to gain funds is a classic – the firm simply performed a rolling token sale. Despite the Financial.org site being down, the ICO sale site is still up and listing extremely high FOIN prices.
Financial.Org Showed Signs of Trouble for Months
Financial.org was created back in 2016, reported Reuters, and spread throughout the Southeast Asian market in the guise of a fintech operation. The firm kept a high profile, even sponsoring a logo on the Williams Formula One team cars.
Financial.org, however, seemed very prepared for its exit, emptying out its offices in Canary Wharf, London, at the end of 2019. The firm had also abandoned its Abu Dhabi offices.
The trouble was, despite the link between Financial.org and the FOIN project, this fact remained relatively obscure to investors. It was just days ago that CoinMarketCap posted a warning, linking the FOIN token to Financial.org.
This allowed the FOIN project to keep faking activity while promising exciting new developments until the very last moment. For a while, things looked much like a regular ICO-based startup going through growth stages. But in the case of the FOIN token, investors soon turned skeptical.
First, there was the token lockdown period. FOIN holders found their funds were taken and exchanged for a digital asset, subject to the whims of the startup. Then, there were highly suspicious calls for token swaps and transfers. First, investors were called to swap their tokens through a dedicated site, to migrate to the FoinWallet version.
Then, holders of FOIN were required to move their digital assets to the FoPay platform, with only a two-week deadline and a fee of $8.75 for moving each token. The sites requiring the token transfers are now also defunct.
AliExchange Acquisition Pumped Optimism Before Crash
Just as FOIN holders expected their tokens would be finally usable, the startup posted another delay in allowing withdrawals. This time, the firm announced the acquisition of an Estonian-based exchange, AliExchange.
Right in the midst of an already planned scam, as the Financial.org firm was unraveling, FoPay and Foin released a breathlessly cheerful announcement of the acquisition.
The AliExchange was supposedly purchased for 1 million FOIN, or roughly $2.5 million back in December. The market was supposed to be the “home exchange” for FOIN. At that time, the asset was already trading on two exchanges known for their shady nature and listing of dubious assets: HotBit, and P2PB2B.
The HotBit price was also vastly different from the one on P2PB2B, where a price anomaly raised FOIN to as high as $3,949 at the time of writing. The behavior of FOIN added to the suspicions that the price growth was not organic, and may have been a decoy for investors.
The fact that the Foin scheme operated in Southeast Asia allowed for the scam to continue while law enforcement was already on its tracks. Reportedly, a crackdown in Taiwan held 10 members of the Foin team. A complaint was issued against Foin in Thailand on December 17, just days after the AliExchange acquisition news. Somehow, Foin and FoPay managed to retain some true believers and pretend all was OK, just as the scheme was unraveling.
The Financial.org firm in the meantime had already received warnings for potential fraud from financial authorities in the United Arab Emirates, Malaysia, Singapore, Indonesia, and Thailand.
FOIN Retains True Believers
Even as FOIN has all the signs of an exit scam, there are still true believers commenting that the asset may discover a fair price. Other comments see the token as a “dead coin trading”, while its blockchain is somewhat still operational.
In the past, schemes like OneCoin and BitConnect have continued to exist despite the crackdown in local markets. FOIN may still see attempts at purchases at its new low price, with the hope the asset goes through new price discovery. But the token remains extremely risky, as there is no guarantee it would be worth anything.
The FoPay project also remains highly suspicious, registered as an Ukrainian company “Foins Blockchain LLC”, with other local founders related to Financial.org.
What do you think about the FOIN scandal? Share your thoughts in the comments section below!
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