80% of ICOs in 2017 were scams
A recent study by Statis Group revealed that 80% of the ICOs conducted during 2017 were misleading, but they account for only 30% of the total investment.
The study took into account the ICO lifecycle run in 2017, from the initial proposal of availability for sale to the mature phase of exchange trading.
"Over 70% of ICO funding (as a volume of $) has been allocated to high-quality projects, although over 80% of projects (with # shares) have been identified as scams," the report said.
In addition, 4% of ICOs failed to accumulate planned capital and 3% disappeared, meaning they were not listed on the exchanges and had no new contributions to the Github code in the 3 months after the conclusion of the ICO.
The total amount of cryptomones and new tokens accumulated in 2017 was $ 11.9 billion, of which 1.34 billion (11%) were allocated to scams such as Pincoin ($ 660 million), Arisebank ($ 600 million), and Savedroid ($ 50 million). , even if many projects in number were scams, the money raised by them was relatively small compared to real projects.
A more serious problem is that of missing projects - a similar report by TechCrunch earlier this month revealed that there are more than a thousand crypto projects "deceased" on June 30, 2018. There are dedicated sites such as Coinopsy and DeadCoins which centralizes these ICOs that fail to maintain their momentum after launch.
The results of these reports show that the cripto industry is still immature and those who initiate ICOs have not yet realized that it is not enough to have a good idea but also have a plan to further develop the project after obtaining the initial funding .
Given that enthusiasm for ICOs remains high - the 2018 investment in this field has already reached 13.7 billion dollars - it is the industry's case that it will self-impose higher standards when it comes to the future plans of of these projects. Otherwise, there is a risk that financial regulators will assume the role of creating rules for this area, rules that have the potential to restrict the development potential of cryptocurrencies.
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It is unsurprising that fraudsters have attempted to capitalize on the hype surrounding the cryptocurrency space, especially given the parabolic bull run at the end of 2017 and beginning of 2018.
Fortunately, the industry is maturing and I believe it is beginning to self-impose higher standards with respect to ICOs. ICO Alert, for instance, is a relatively new company that vets ICO listings to crack down on fraud and empower others to separate the wheat from the chaff.
The jury is still out regarding how regulators will ultimately impose their will. With that said, there is a silver lining: Regulatory clarity may serve as a major catalyst for a stampede of institutional and retail money into the ICO marketplace as well as the industry as a whole.
At any rate, it will undoubtedly be intriguing to monitor developments concerning ICOs as the industry continues to mature.
I agree with the author, @ant1dot396!