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Another swift blow to the already downed reputation of ICOs has been done. Vanbex, the blockchain consulting firm which raised $22 million with their ICO, had all of its assets frozen.

The Canadian police took swift account and the developments were reported in a document released on March 14th.

The document states that founders Lisa Cheng and Kevin Hobbs claimed Vanbex was a crypto company based in Vancouver. Unfortunately, Vanbex turned out to be a shell company which did not develop a single usable product.

Hobbs had two of his accounts frozen and two new Land Rovers seized. The police also ordered both Cheng and Hobbs to not damage, borrow or sell their Vancouver condominium. This order lasts for 30 days and can be further extended if the court sees fit.

Back in 2017, Vanbex “launched” the cryptocurrency Etherparty and its FUEL token. The token was meant to be the core of the ecosystem which would handle Vanbex’s smart contracts system. As with most ICO scams, this project was backed with many promises of massive returns for investors.

Vanbex decided to go all-in

According to Cheng and Hobbs, the company managed to raise more than $22 million in the FUEL token pre-sale. The document also notes that this large amount of money allegedly came together with a rather quick acquisition of a huge amount of wealth.

The scheme quickly began to unravel and the Canadian Mounted Police (RCMP) launched a quick fraud investigation into both Etherparty and Vanbex. It was determined that starting from May 2017 up until July 2018 Cheng and Hobbs were guilty of fraud.

They were committing fraud by false offering corporate investment into FUEL tokens while having no intent to use the funds for the FUEL token development. All money taken from investors was used solely for the personal benefit of both founders.

The document also lists many objects of property purchased with the funds taken from investors. These objects include real estate, vehicles and a decent sum of money went to fuel Hobbs’ gambling hobby. Hobbs’ criminal history was also revealed and it turned out he was tied to money laundering and drug traffic.

A few hours ago, the company’s Twitter account posted their official response.

At press time, CoinMarketCap has Etherparty at $0.013210.

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About Ian Karamanov

Based in Sofia, Bulgaria. Writing about cryptocurrency, politics, finance and esports. Keen interest in unedited history, spirituality and freedom.

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