Scammers Impersonating Seele ICO Admins Steal $1.8 Mln from Investors

08.02.2018

$1.8 mln worth of Ether tokens has been allegedly been stolen after scammers were able to infiltrate the Seele initial coin offering (ICO) and pose as administrators of the group’s Telegram channel. Scammers impersonated @SeeleSupport and @nicsmith, two Seele Telegram channel admin accounts, and sent direct messages to potential investors, encouraging them to send ETH tokens in a ‘private sale’ which would take place before the token sale.

Unwitting investors, taken by the apparent admin status of the accounts, sent $1.8 mln worth of ETH tokens to an unknown wallet. The handle @nicsmith was made to appear as if it belonged to Dr. Nick Smith, a member of the team listed on Seele’s website as a Data Analyst, complete with the name “Nicholas Smith” and a picture of Dr. Smith taken from his LinkedIn profile.

Seele discovered the plot this weekend and warned members of the Telegram group not to send any more money to the scammers. In prepared statements, the startup acknowledged the situation and wrote that they were “deeply sorry” for any funds investors may have lost.

In response to the scam, management formed an emergency response team and added a double authentication method for administrators. They also posted the scammer’s wallet address, 0xB3239EF7a0fC08d56402a44A5367b8cdDaf295b8, in the hopes that no additional investors would be duped into sending their funds.

The scam does not appear to have derailed Seele’s plans to launch its ICO. Cryptocurrency website ICOdrops reports that the Seele ICO is set to take place “soon” and that the self-described ‘blockchain 4.0’ company is looking to sell 1 billion ERC-20-compliant SEELE tokens.

However, some investors who lost money have begun to refer to the scam as an “inside job,” as only existing administrators of the Telegram channel can make other members administrators. It is still unclear how the scam will affect Seele’s efforts to raise funds.

The Seele impersonation scam is only the latest in a string of high profile scams to rock the cryptocurrency world. Impersonating owners or admins, like what happened to Seele, is a favorite tactic of scammers looking to cash in on the hype around ICOs.

Bee Token’s ICO, which took place from January 31st to February 2nd, 2017, was also the victim of an impersonation scam. Although Bee Token did manage to raise its goal of $5 mln, scammers sent out phishing emails with fake wallet addresses during the ICO, managing to steal about $1 mln in ETH.

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