Confido (CFD) holders’ positions got wrecked Sunday, as the new and seemingly promising escrow-related cryptocurrency allegedly ran into legal troubles.
A ‘Black Swan’ Legal Event
Accordingly, the price of CFD shot down over 85 percent — from $0.68 USD to less than $.10 between 16:00 UTC and 23:00 UTC on Sunday, marking a prime example of investors panic selling in the face of a “black swan” event.
Korean cryptocurrency exchange KuCoin even seemed to crash temporarily as investors flocked to one of the few global exchanges that offered BTC-CFD and ETH-CFD trading pairs.
Not Sure if We Can Get Through This
In their post, the team explained that the issue pertained to a contract:
“Right now, we are in a tight spot, as we are having legal trouble caused by a contract we signed. We signed the contract with assurance from our legal advisor that there was minimal risk and it would not be an issue.”
“I can’t and won’t go into details, but he was wrong. It is a problem.”
And while the CFD team said they’re working to rectify the mistake, they also admitted “we cannot assure you with 100 percent certainty that we will get through this.”
In the least, it’s an acutely devastating turn of events for the Confido community as a whole, and — while it’s too early to say a recovery isn’t possible — if Confido does go under, its downfall will go down as yet another infamous casualty in the ongoing Bitcoin boom.
A Definite Shock After the Buzz Confido Was Creating
Investors certainly didn’t see this upending coming, as CFD had many in the cryptocurrency community buzzing in recent days.
Billed as an escrow payments service for online purchases using ChainLink smart contracts and proprietary shipment tracking services, Confido’s micro-cap ICO created excitement by raising only 1,235 ETH — what was approximately $375,000 at the November 8th ending of the CFD ICO.
And as CFD has a circulating supply of only 9 million tokens, investors saw major upside in the humble and scalable project.
To say the least, then, Confido investors were shell-shocked on Sunday as the token lost nearly 90 percent of its value.
Allegations of Scams, Anger Swirls
Unsurprisingly, many in the community are alleging Confido pulled an exit scam on investors.
These scam allegations have been countered by others asserting that Coinfido’s devs haven’t sold any of their CFD holdings yet.
Redditor u/risorial assuaged peers to this effect:
“The founders did not sell a single token. Support is very active on Telegram. Sucks, but it doesn’t seem obvious at this point that anyone from their team ran away with any money.”
It remains to be seen what happens next.
If the problem really does end up being the fault of Confido’s legal firm, then the community may end up rallying around the CFD team once more. The verdict’s still out.
At press time, CFD’s making a hiccup of an acute recovery — from $0.10 at 23:00 UTC to $0.20 at 07:40 UTC.
UPDATE: As of 14:00 UTC on Monday, November 20th, the Confido team has apparently deleted all their social media accounts, lending credence to the notion that an exit scam is occurring. The price has plunged even further, now sitting at around $.03.
What do you think? Did CFD get screwed over by their law firm or is this an obvious exit scam in our midst? Let us know where you stand in the debate in the comments below!
Images via Thomas Van, CoinMarketCap