Almost half of the projects published on the ICO did not carry out any works prior to start of fundraising, and a majority of the issued token is trading below the price of its initial proposal. Such data leads the company’s research ICOrating.
Method of raising Finance through the conduct of the ICO is gaining popularity since last year. For the last year of the initial offering of coins allowed the projects to raise $5,48 billion investment, and for the first three months of 2018 to $6,33 billion.
Recently the head of the Binance Chanpen Zhao (Zhao Changpeng) noted that the model of raising funds through ICO preferable to venture capital even taking into account the risk of fraud, which is of serious concern to regulators only in the beginning of this year, the cryptocurrency market lost about $9 million a day as a result of various illegal actions. In April was followed by a loud ICO fraud in Vietnam for $660 million.
The study ICOrating for the first quarter revealed other problems of the market of initial offerings of coins. At 46.6% of projects there was no development to their ICO. As the researchers note, it turns out that despite numerous warnings, half of the investors invested in the idea, not backed by even minimal work product.
More than 9% of the projects were not existing businesses to the ICO, and 40% did not provide absolutely no information about the strategy of asset management and even the names of the leaders.
In the I quarter of 2018 was organized 412 ICO, only 204 of them managed to raise more than $100 thousand. Tokens 89 of them were included in trading on cryptocurrency exchanges. However, 83% of those coins were traded below the price of conducting ICO.