One of the best known ICO expert till recently, Jerry Ji Guo faces a potential imprisonment sentence of upto 20 years for fraudulently conning his clients to a tune of $3.5 million. He was arrested by the law enforcers, in this connection, earlier this month. The terms of punishment might sound harsh but the severity of the charges levelled against him and the humongous amount of wealth involved justifies it. Greed has no limit and Jerry Ji Guo fell in its trap.
About Jerry Ji Guo
Jerry Ji Guo is a 31 year old Yale University Graduate. He is a former journalist who worked for the much respected newspaper media – The New York Times. But soon with the emergenge of Blockchain technology and its rise in 2016, his fortunes changed as he became a blockchain entrepreneur and even led bitcoin’s marketing operations. Now Mr. Gou was dealing in millions and started presenting himself as an ICO expert & consultant. This is when greed got the better of him and he started making false promises and did not honour his contracts, while collecting the payments in Advance.
Mr. Guo did fundraising using cryptocurrency through Initial Coin Offerings (ICOs) after presenting himself as an ICO expert. Thereafter he would ask his clients, mostly start-up companies, to make a deposit in a crypto wallet as a payment for the services that he will be rendering to them in the future. According to FBI Agent, Mark Matulich, Jerry would win the trust of his clients by “intentionally making materially false and misleading statements about his experience and credentials as an ICO consultant.” Matulich further alleges that after receiving the payments in advance, Jerry did “little to no work as promised under the contracts” before encashing the wallet without the authority and knowledge of his clients.
What are the lessons from this development?
The biggest lesson that is learned from this incident is that in the field of ICOs, it is easy to commit a fraud but the culprit cannot dodge the law enforcers as the traces of the culprit’s transaction is saved at multiple sources in the Blockchain Platform. All kinds of fraudsters are attracted to cryptocurrency these days because of the lack of regulations. But they tend to forget that the Blockchain Technology has been specifically designed for the purpose of decentralisation and accountability. Fraudsters can hide their identity but not they cannot hide their transactions. Law enforcers can easily get the source and destination of a transaction in the blockchain platform and when they receive a complaint from either the payee or the beneficiary, they can easily know the actual or atleast the fake identity of the fraudster from the complainant itself.
Another lesson that is learnt from this incident is that the investors of ICOs need to be careful. They should run a thorough background check about the founding members of the ICO, the status of the current project undertaken by it, its viability, whether the offerings of the ICO is too good to be true, Does the ICO belong to an established or a start-up company, etc. This checks, which must be conducted in default by the people before purchasing an ICO, is often ignored.
It is to be seen whether Jerry Ji Guo actually receives a 20 year imprisonment sentence or not. But I personally believe that Mr. Gou should be handed over a severe punishment to set an example for others. This will immensely help in winning back the trust of the investors who have been duped and shall also help the cryptocurrency to gain some much needed momentum, at a time when it is constantly being dumped by the investors over the concerns of security and strict sanctions by the Regulatory bodies all around the globe. What are your views on this? Please mention your views in the comment section.