Benebit ICO Scam: 2.8M USD Scam- What actually happened

Even as the cryptocurrencies market see interesting innovations every day, risks and scams are also increasing at a high rate if not by an equal proportion. One such case has been of Benebit ICO. The British Virgin Islands-based company offered a very promising business proposition in the beginning. The retail starts up aimed to creatively destruct the traditional cashback and loyalty market by integrating it with blockchain technology to provide a decentralized platform that would have enabled interaction between the companies and the consumer across the globe.

The concept was very simple – it proposed to use an application and physical card (Benecard) to allow users to collect loyalty points and exchanged with Benebit tokens which in turn could be used at consumption oriented online stores. For companies, the benefit was to expand their customer base without incurring much cost. The other advantage that the company offered was the acceptance of multiple currencies, which basically means that users and companies could choose to transact via their choice of currency – fiat or crypto.

As per the plan, the Benebit token (BNE) was scheduled to begin with a pre-ICO running from January 22 to March 21, 2018, to be followed by the main ICO from March 25 to April 30, 2018. Out of the total supply of 300 million tokens, 225 million were up for sale and were set at a rate of 1 ETH = 3,000 BNE. As far as the company leadership is concerned, John Laverty was the Co-Founder and CEO. Besides him, the top managerial group included the co-founder and CTO Howard Sharp, Ian Livingstone (COO), Victoria Ellison (CFO), and Robert Davis as CMO. The company was headquartered in London and is almost a year old now.

However, as events unfolded, what seemed like a very promising and good investment opportunity turned into a full-blown scam. Soon after raising money from investors, the Benebit website went down along with its social media accounts. Later it emerged that photos of Benebit team members were stolen from the staff page of a British Boy’s School. Other things that raised suspicion about the company included a questionable Linkedin page of the CEO, John Laverty, where recommendations were made by fake people. Moreover, his previous employment records with Google and Goldman Sachs could not be found and verified. Sadly, but it is estimated that the company perhaps got away with over US$ 2.8 million.

They spent 500,000 USD on marketing and managed to raise 2.8M USD.

They even scammed their marketing team, ICO handlers (devs) and their telegram managing team.

The experience of Benebit ICO reiterates the fact that as much there are opportunities in this market, as much is the potential tail risks. It is always advisable, therefore, to undertake proper due-diligence exercise when investing in this space with a thorough background check on the company and its team members.

Etherscan - https://etherscan.io/address/0x39b6ce3428068ce97db218fd2f8df6909b331308