For many people, the idea of cryptocurrency meant financial freedom. To some, it was a step in the right direction - away from centralized money and government-controlled bonds subject to freezing and inflation at the whim of Big Brother.
While cryptocurrency has many wonderful incentives, it also presented an opportunity for malicious people with the technical know-how to bamboozle investors out of their money.
We've seen many instances of copycat tokens, ponzi schemes, deadcoins and the unaffectionately named shitcoins that have plagued the already infamous reputation of crypto.
Following a series of negative trends, the Stox project now finds itself at the receiving end of a class action lawsuit.
Stox (STX) is a cryptocurrency token that operates on the Ethereum platform. The Stox team presented their project as a "next-generation market prediction platform". They promised an advanced AI model that would one day be able to predict results of events such as sports by taking into account the input from users(Machine Learning).
However, after over two years following their ICO, they have little to nothing to show in terms of progress. The Stox ICO was held on August 2017 and grossed over $34m USD in less than 48hours with thanks no doubt to a celebrity promotion by boxing superstar Floyd Mayweather.
Stox activity went up amidst the hype and at its peak (Aug 25, 2017) its traded at $2.74 in exchanges. source
It has been downhill ever since. The Stox Markets App – though exciting at first, quickly became boring and eventually devoid of activity.
Stox had promised investors that they could win tokens by staking in predictions but later reneged on that feature and decided to pay "only the top predictors".
This did not sit well with many investors and soon the Stox price started dropping. Today it sits at an abysmal $0.0148 source
The funds raised from the ICO have yet to be accounted for and the project has now been labeled as an exit scam.
The founder of Stox, Moshe Hogeg, has also been accused of using the funds to finance another dubious blockchain venture (SIRIN LABS).
If you have been affected financially by this development, you can join the class action lawsuit against Stox here
So what do you guys think, will IEOs be any different?
Should Ethereum be regulated to stop the proliferation of these kind of scams?
What other measures can be taken?