BNB 1.80%
BTC 0.61%
DOGE 2.62%
ETH 4.14%
PEPE 8.38%
XRP 5.80%
SHIB 4.15%
SOL 2.13%
Best Crypto Poker

USD 1 Billion Under ICO Red Flag

Sead Fadilpašić
Last updated: | 1 min read

Having reviewed documents produced for 1,450 initial coin offerings (ICOs), The Wall Street Journal reports finding 271 project with some sort of red flag, ranging from plagiarizations to fake teams.

Source: iStock/vladm

The red-flagged offerings have raised more than USD 1 billion total, while investors have so far claimed losses of up to USD 273 million in these projects, according to lawsuits and regulatory actions.

The 1,450 ICOs analyzed claim to have raised at least USD 5 billion, meaning that the presumed loss makes up 20% percent of the money raised.

Out of all these ICOs analyzed, 111 were found to have copied whole paragraphs in their whitepaper from other projects, according to the WSJ. An additional 121 didn’t disclose the name of a single employee and several of them listed team members who either didn’t appear to exist or were real people who said their identities were being used without their knowledge. Further, at least 24 companies were found to promise financial rewards without any risk, which is strictly forbidden by the US Securities and Exchange Commission.

ICOs are still a high-risk investment, especially if potential investors do not do their research carefully. In 2017, 46%of all ICOs failed, while 13% “semi-flopped.” Following a growing number of ICO-related concerns and money lost, the SEC has begun a wide crackdown on any malpractice visible – but until more non-restrictive and clearly defined regulations have been set in place, officials urge investors to remain cautious.