ICOs has been quite a hype lately. Though this controversial fundraising method is attracting a lot of investors due to the possibility of high short-term returns, it is very risky. And the unregulated nature of it also makes it a favorite of fraudsters.

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One of the biggest ICO scams to date has now surfaced. The organisers of the much-hyped ICO of Benebit have gotten away with millions scammed from early investors. The exact figure is not known, but according to many estimations, it is somewhere between $2.7 million to $4 million.

Before the news of the scam surfaced, the Benebit ICO was all over the news – it was one the top-rated ICOs by multiple ICO review websites.

The operation was going very well until someone spotted that photographs of the Benebit team were stolen from a British boys’ school website.

Based on all the updates, it seems that the scam was well orchestrated from the beginning. The team was active on social media over the year and had an excellent PR team as well. The ICO attracted the attention of a lot of potential investors, and had over 9000 followers on its Telegram channel. Reportedly, Benebit had spent almost $500,000 on market promotion.

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But now Benebit has almost disappeared from the internet, and ICO review sites have wasted no time in scrapping their positive reviews of the ICO, which was less than two months away. The Benebit official website was shut down, along with its other social media accounts. However the Telegram channel is still active, as hired moderators were responsible for updating the channel.

The affected investors are now taking their grievances to this sole channel. One investor is claiming that he had invested as much as 14 BTC and another 300 ETH. But all of it is now gone. Apart from the complaints, the channel is flooded with memes. People are also sharing suicide helpline numbers as a joke on the channel.

The pre-sale event was promoted by the ICO Syndicate, a well-known name in the ICO market, and now the victims are venting their anger at that entity.

As a part of the verification process, all third-party promoters took the passport details of the founders of Benebit. However, they all turned out to be fake.

This scam highlights some clear shortcomings in the unregulated ICO market. Even though the passport details of members of the firm were taken, no-one actually bothered to verify them. This also raises questions about the recommendations and ratings provided by some big names; Benebit was highly-regarded by almost all of them.

Multiple market regulators, including the SEC, have issued warnings about the risks involved in ICOs. And though the returns are alluring, investors need to thoroughly check the background of a business and the team behind it before investing.