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With the Securities and Exchange Commission moving to crack down on fraudulent encryption schemes, the fascination of crowdfunding capital through the first offers of coins on blockchain platforms seems to fade.
Although such investments offer ease of entry – lawyers, banks or regulators are not needed – they have also proven to be mature for grafting, with many schemes lacking valid business models or track records.
At the end of the fiscal year and a year after the setting up of its Cyber Unit, the SEC reported that it had taken action against more than a dozen digital resources and ICOs.
"Some of the offers are simple frauds disguised as emerging technology," the regulator said in his annual report.
Many investors, attracted by the promise of a revolutionary technology, have learned it the hard way.
In 2018, fever around ICOs seemed to decrease as rapidly as it had increased.
A research company, ICORating, found that while the ICO market more than doubled in a year – with an increase of over $ 11 billion in the first half of 2018 – 55% of the ICOs in the second quarter of 2018 did not reach the their crowdfunding goals.
The founder of a crypto-crowdsourcing platform has recently expressed what has become a common feeling in the blockchain space. After closing its proverbial doors last year, Cofound.it CEO Daniel Zakrisson wrote in September: "The concept of crowdfunding based on the concept of ICO, led by the community [is] dead."
To read the rest of the story, check the Journal website.
