One of the unfortunate realities of an emerging industry such as blockchain and cryptocurrency is the fact that there a number of scammers who take advantage of the hype surrounding the industry to deceive investors and run off with their money. When ICOs were at the peak of their popularity, the Securities and Exchange Commission in the United States was forced to shut down many of them because they were fraudulent or unregistered. Even though ICOs are no longer as popular as it used to be, fraudulent blockchain and crypto-related businesses are still a reality of the industry.
Recently, police in the Netherlands arrested the CEO of Komodore64, a blockchain-based gaming startup that raised $86 million from investors earlier this year.
The blockchain game development firm had launched in June of this year and had apparently developed a platform in which gaming transactions could be tracked on blockchain and with the release of the K64 token, they were able to raise millions of dollars from investors but the business has since gone bankrupt.
Allegedly, Sam N., the CEO, claimed that the company had raised funds through an investment from Goldman Sachs but in reality, he had hired people to impersonate a delegation from the American investment firm. The launch party for the company also allegedly cost tens of thousands of euros but the suppliers and employees were not paid for the work and as such, the company has filed for bankruptcy.
Also, John Dullaart said that Max Theyse, who has been presented as a co-founder of the company, had never occupied the position.
“I think that N. presented him as such. The real co-founder is someone else. This person says he is surprised that the co-founder was someone other than himself,” Dullaart said.
Sam N. has since been arrested by authorities at a hotel where he was staying due to fear of threats from angry investors who had lost their money by investing in his company.