More Than 10% Of $3.7 Billion In ICO Profits Has Been Stolen By Hackers
Content adapted from this Zerohedge.com article : Source
by Tyler Durden
Investing in ICOs - and the cryptocurrency space more broadly - has frequently been compared to investing in penny stocks, like those sold by Jordan Belfort's Stratton Oakmont - the firm from "The Wolf of Wall Street."
But this is a facile - though convenient - comparison. A more precise analysis of the risks associated with ICOs will find that most of more than 800 coins that have been created over the past 18 months will inevitably confirm that ICOs are far more risky than the average penny stock.
Indeed, incompetence and outright fraud aren't just rampant in the ICO space: They're the norm; even the largest - and purportedly most credible - ICOs - have been tainted by scandal. Offerings like Tezos, which raised more than $230 million and was backed by widely respected VCs like Tim Draper - have been hit with dozens of lawsuits from investors alleging negligence, embezzlement and fraud, according to Reuters.
By some estimates, up to 90% of these offerings will lose money for their investors.
Unlike stocks, ICOs face a singular risk: Their vulnerability to theft. Many investors in the DAO - a type of proto-ICO - lost a large chunk of their investment when hackers stole tens of thousands of ether tokens. At the time, the coins were worth $150 million: Today, their value has grown by orders of magnitude.
In a recent study, auditor Ernst & Young discovered that theft in the ICO space is even more pervasive than many had believed.
More than 10% of funds raised through ICOs are lost or stolen by hackers, according to a report about the risks of investing online. The firm examined 372 ICOs and found that about $400 million of the $3.7 billion raised to date had been stolen. Phishing - a relatively basic hacking technique where unwitting investors willingly turn over their information to hackers after being fooled with a false link.
Phishing was the most widely used hacking technique for ICOs, with hackers stealing up to $1.5 million in ICO proceeds per month, according to the report.
The research also noted that the volume of ICOs has been slowing since late 2017. Less than 25 percent of ICOs reached their target in November, compared with 90 percent in June.
The study comes amid a cryptocurrency investing craze, with young companies raising hundreds of millions of dollars online to fund their projects, with often little more than a handful of employees and a business plan outlined in a so-called "white paper".
The challenges faced by more recent ICOs in reaching their targets are partly attributable to the lower quality of projects, as well as issues that have emerged around earlier projects, said Paul Brody, global innovation leader for blockchain technology at Ernst & Young (EY).
"The volume just exploded, people raised their fundraising goals and the quality just dropped," Brody said in an interview.
"We were shocked by the quality of some of the white papers, we see clear coding errors and we see conflicts of interest between the companies issuing tokens and the community of token holders."
E&Y also noted that investment flows into ICO tokens are often driven by "fear of missing out", or "FOMO", and have no connection to market fundamentals - though any Twitter or Reddit user could've told you that.
Indeed, "FOMO" has led investors to pour money into ICOs at record speeds, with the 10 shortest lasting ICOs attracting $300,000 per second on average. Many ICOs have seen the value of their tokens plunge this year amid a broader selloff in the crypto space.
Indeed, as we noted earlier today, cryptocurrencies have been on an almost uninterrupted slide...
Most ICO's don't have any real product and sometimes not even a working blockchain while raising millions in a few hours. That stuff is meant to implode! That's why I only invest in solid projects instead of speculating on ICOs
@zer0hedge...bro On the other hand, more than 90% of IPO profits are stolen by Venture Capitalists and/or Wall Street banks.I'll stick with the 10% fee, thanks. Hackers, at least, are the kind of thieves I can respect because they put in an honest day's work.youre right, I have a better idea, lets just print money and give it to the banks when their speculative bets go wrong ..... and btw, let me funnel cash into an IRA/401k, week after week, so its locked up for 40 years of my working life, with no guarantee of return ..... more FUD .... more BS from E&Y .... I don't recall them sounding any alarms in 2007 .... BTC is decentralized .... they cant control it, so it must be torn down.just admit your shiny new currency has sagging tits? Are you in fact saying that the biblical ladies of the court of King Karakapis are dirty French whores?And the famous bitcoiners neatly dapped their lips with a collective napkin, got up and stiffed me with the bar tab. Then I was chasing them out of the parking lot throwing rocks and bottles..thank you for sharing with us...
I am wondering if you lose 50-100k in coins, will you still "respect" them?
Lol, is this how you always comment, I might have to follow you. True about actually working, but props for setting up a system where they can legally rob people, that's what happens when we trust people..... well certain people
90% IPO profits are stolen!! Seriously.??
The currency has become ico in recent times
With the search of Oujda one of them says
There is no doubt that there are successful, tried and tested strategies that are few and far between. The digital currency market is developing every day and the entry of large investors makes trading platforms risky but highly profitable as long as you have a HODL mentality. And multiply your investment by a large amount of up to 10X times,
Regardless of the different trading strategies that rolling traders decide to use, there are a number of elements that must be available in these strategies. First, each trading strategy should be easy to use and at the same time easy to implement and implement. In addition, the strategy of trading in digital currencies must be effective. If the strategy used provides the trader with protection for the money he invests, while providing opportunities for profit, it is a good trading strategy. However, before you begin to look for trading strategies, it is important that the trader has a clear and objective understanding of the final objectives he wants to achieve in the encrypted currency markets.
Strategy will be. As follows: target 500 thousand dollars ...
2018 will be the role of ICO and make sure to speak because the year 2019 and 2020 will not be much ico and the reason that it will be fought by governments on the one hand and ideas will not become new this year and after that we will work on ico.s because the profit is larger and folds $ 2000 with 14 thousand and another friend entered $ 3500 now with him 17 thousand dollars. . .
A rule that I will focus on:
60% of the capital of ico's
20% long-range storage
15% average storage range
5% daily speculation
The division of capital in ico on many projects has up to 30 projects. . .
Ico projects are very strong and partnership with well-known companies and not children's toys and ico not spins in groups)
Maricke in this all draws me coins of this shape
Thank you for sharing with us this useful topic.
@zer0hedge
To invest a large percentage of your money is very dangerous and you may lose everything I do not know this person who said this how he thinks
I'm not quite sure I understood what you were saying here, do you mean that 60% of your investments go into ICO's? You must do a ton of research if that's the case
Yes this is his article but it is not
He just said that someone told me this and wanted to discuss it
Here
Bro dont invest huge money in once and also dont invest in one site ..and buy one coin ..invest in a different coins and make profits if some are gain high and some are low ..we can manage the profits..
I agree that the currency has become ICO.
There are many ICOs for fraud and scam aimed at deceiving investors. There is no doubt that these malicious people are in the way of investors who are new to the market. The hot money of new investors naturally increases the investments made in ICOs. We can say that ICOs will continue their course in full speed in 2018 and its scope will expand further. Blockchain infrastructure development, payments and speculative trading, as well as the development of many new underground projects such as notary service, real estate investment, loyalty program, supply chain management, and intellectual property rights management are clearly seen.
Research and diligence before investing money in these currencies should be dealt with strictly
Many friends know Khusraw a lot of money because of ico coins
absolutely. Thanks for your comment.
This is a duty we are here to benefit from each other and share information and discuss topics. This is a great honor for me
I did glance at a few ICOs, but nothing really struck me as something I'd want to put money in. There was one where the ICO sale still had the coin at over a dollar, it was like an ETH for 1100. I doubt it launches there. Other things I noticed were the inability to get into ICO's and the high amount required to buy (at least for a small time investor like me.) But you're very right, I don't see ICO's slowing down, especially as the technology, and our understanding of it, progress
These scam ICOs first time pay but next times no pay.I am also a victim.
I think a good amount of time should be spent in researching the ICOs. Sometimes it is really hard to know, if the people behind the projects are real people or some robots :)
Everyone wants to profit without fatigue and this is a very big mistake
The initial presentation of the digital currency
Encrypted
Initial Coin Offering is an unorganized way in which funds are raised for a new digital currency project based on the International Coin Offering or the initial presentation of the encoded digital currency or ICO is a token sale campaign arranged by start-ups to bypass the strict and structured capital collection process Required by owners of capital or banks. In an ICO campaign, or a token sale campaign, a percentage of the encrypted digital currency is sold to the project's supporters, investors or buyers of the project currency.
This currency can be purchased from early sales campaigns called pre-ICO ie selling codes before ICO and Bitcoin, ETH, USD or EUR, but the investor does not get the symbols or the project currency directly, but after the launch of the ECO. What distinguishes Pre-ICO is that the percentage of bonus or high profits unlike the period of ICO and Pre-ICO is the initial basic support.
This currency has recently become extinct and must be considered a threat. This is very dangerous and may lose the investor a lot
Thanks for the valuable participation
@zer0hedge
Yes what you said is correct bro...every want to huge profits with a less investments..this is soke times turned as a risky and scamed..so invest money and wai for long time to get huge profits...
Yeah everyone wants to profit.
The path that that stimulus actually takes in order to get to main street can vary...
...but who cares, the more money main street has to spend, the better...
...right? Hey, at least the hacker had to work to steal the "money", the fucking bankers/financiers just gift it to themselves all they want with the click of a button. The taxpayer and society at large pay the real costs...
"Full Faith and Credit"
same as it ever was!!!
@zer0hedge
fking disgraceful. Hope the hackers get there just dues.
If you have set up a system and are really attacked and your users become victims, why not share detailed information about the situation? If human error is the reason for such an attack, make it as reasonable as possible to publicize it so that people do not start conspiracy theories because of insufficient information. Transparently disclosing work after such an attack would harm both the project and its community.
What is frustrating is that the projects that did not provide a detailed explanation after the attack did not question users at serious levels. Especially when we are at a time when we can easily "proof". It is a pity that after experiencing such a grievance, the ICO team is not satisfied with a statement made by the team half-heartedly, instead of asking for solid evidence and clarifications.@zer0hedge
May be u r right.
well this is my first time here and i think i will gat some very information and knowledge here so i am following you .. as this is amazing i mean i love the article and i think i will gat more awesome stuff here so far