A mining scheme based in Vietnam collapsed as its CEO allegedly took all its funds and fled the country. Yesterday, investors and board members at Sky Mining have tried to reach CEO Le Minh Tam, but received no response.
This wouldn’t be completely out of the ordinary, but people visiting the company’s offices found that the building was closed, its name was removed, and all the mining rigs in its facility were being removed by people claiming to be a maintenance crew, according to a report by VnExpress.
All these factors led to the suspicion that Tam may have fled with $35 million from investors, something that was later confirmed by Le Minh Hieu, the deputy chairman of Sky Mining.
Hieu said that Tam flew to the United States with the funds of both the company and its investors, though he isn’t sure exactly how much of Sky Mining’s assets in total went missing. He is now scrambling to assemble a team that would help with the restitution of funds to investors.
“[The board] has reported this to the police and showed evidence that we are not guilty. We are victims, too,” he said.
Unrealistic expectations
Sky Mining presented itself as a company that specializes in mining a variety of cryptocurrencies through ASICs. Investors would pay for the management of these machines in the company’s facilities and supposedly reap the rewards of this venture.
They were convinced to enter the ordeal by promises of 300-percent returns within 12 months, a claim we are all too familiar with since the whole Kodak Kashminer fiasco by Spotlite USA.
Much like Sky Mining, Spotlite promised investors with returns that seemed too good to be true in exchange for a $3,000 up-front payment. However, a look at the returns that current top-performing ASICs provide proved that any results from the endeavor would be anemic in comparison.
We suspect that Tam might have noticed that the jig would be up at some point and decided to cut his losses and take whatever he can far away from Vietnam’s authorities.
Suspicions confirmed
In a private Facebook (NASDAQ:FB) group for investors, Tam said that he apologizes for “everything,” citing the unpredictability of the market and the falling profitability of mining as reasons for his exit.
“My last resort is to stay hidden from public to protect my life,” he added.
In a later video update, Tam changed the story, saying that he is undergoing therapy and he reassured investors that he isn’t running from the company, according to a report by The Epoch Times in Vietnamese.
“I will contact you as soon as possible to work with you through all the workshops and you will have the money,” he said.
While laying on a leather-backed bed, he added that “next week the mining rigs will operate again.”
The story doesn’t add up, however, as there’s no logical explanation for why the mining rigs had to be removed from the facilities while he wasn’t present. Although there’s no proof that he is running away, the series of events is unusual.
It’s more likely that he saw that the 300-percent returns promised by Sky Mining were entirely unrealistic and that the entire operation itself would prove to be irredeemably unprofitable, choosing to shut everything down as quickly as possible before the company began hemorrhaging money.
His previous Facebook update suggests that he might declare bankruptcy and attempt restitution for those who invested in the project, but deputy chairman Hieu’s statements suggest that this may indeed be an exit scheme.
Scam or not, disasters like these are giving the cryptocurrency space a terrible reputation in Vietnam, a country that was recently impacted by a scammy ICO that siphoned nearly $660 million from investors.
This article appeared first on Cryptovest
