What’s Going On?
A new report claims a full 80 percent of ICOs held last year were scams.
Why Does It Matter?
The report published this month by Satis Group calls these wayward ICOs Identified Scams, reported CoinDesk. These are projects that “did not have/had no intention of fulfilling project development duties with the funds, and/or was deemed by the community (message boards, website or other online information) to be a scam.
“On the basis of the above classification, as a percentage of the total number of ICOs, we found that approximately 78 [percent] of ICO’s were Identified Scams, ~4 [percent] Failed, ~3 [percent] had Gone Dead, and ~15 [percent] went on to trade on an exchange,” the report continues.
What Has Been The Reaction?
“That’s…not great,” said Mashable’s Jack Morse. “The skeptical investor doesn’t need to look far in order to see this in practice. In fact, the scam-filled nature of ICOs is so widely known that the SEC created a fake ICO just to warn people away from them.
CryptoGlobe reported the study also found the number of ICO projects based in pro-crypto countries has increased. Last year, most projects were US-based, it was noted, whereas this year the Cayman Islands dominate. In the US, the number of fundraising projects dropped from about 32 to 10 percent.