A buzzy new cryptocurrency enterprise vanished the evening of its supposed launch with £500,000, or roughly $690,000 US.
The founders of CryptoEatsUK announced their app CryptoEats as a would-be competitor to other online meal delivery services in the United Kingdom. Despite claiming to have “$8 million in Series A funding” in a press release, the company offered an opportunity for investors to buy its custom cryptocurrency, which could also be used for a 5% discount on all orders.
In addition to grandiose predictions about dominating the food delivery market, CryptoEatsUK promised a slew of features that seemed unlikely, if not suspicious: Users could order individual items from multiple restaurants in the same order and guaranteed five-minute coffee delivery. Delivery people would be paid well above industry norms and employment benefits.
The official launch of the app kicked off with a party attended by many well-known social media celebrities and influencers wearing CryptoEats-branded swag.
Within a few minutes of the announced launch of its app, however, CryptoEatsUK apparently ceased to exist. Funds in its crypto-wallet were emptied, its social media accounts were deleted and its website went dark. Links to its press releases also vanished, and its domain name is currently listed as being available for sale.
The company, its cryptocoin, app, celebrity-endorsed party and branded merchandise were all part of a scam to empty out a single cryptocurrency account. While the payoff was substantial and is unlikely to be recovered, it stands out as an especially elaborate means of defrauding crypto-investors. Others have used simpler and more obvious methods: One TikToker successfully created his own currency called “SCAM,” (short for Simple Cool Automatic Money) which hit a $70 million market cap at launch.
The lesson here is straightforward: The transferability and relative anonymity of cryptocurrencies, combined with their hyped nature make them an ideal lure for scammers.