on the crypto
That of the ICO (Initial Coin Offering) is an extremely controversial sector. During 2018 aroused a considerable sensation, even if not among the most discerning professionals, one research conducted by the Wall Street Journal, according to which well 271 ICO on the 1450 carefully observed had been extremely suspicious. Projects on which capital had been invested for over a billion dollars and which over time had turned out to be like bankruptcies, if not outright scams designed to take advantage of the digital asset boom.
However, according to a more recent research, carried out by ICObench, a platform which deals precisely with analyzing the various tokens issued, the quality of the sector would increase significantly.
The research published by the company, however, must be taken with some caution precisely in light of what has happened in the recent past. However, theincrease in the ICO success rate, who also accompanied himself to a significant improvement in the general quality of the projects presented.
This growth is evidenced by the fact that the amount of funds raised in May went to projects with a very high valuation at 85%, compared to 68% in April.
At the same time, however, it should be remembered that the preponderant part of these funds are attributable to a single project, namely the Initial Exchange Offering (IEO) of one billion dollars proposed to the markets by the popular exchange of Bitfinex cryptocurrency. It should be remembered that IEOs represent an alternative model to the classic ICOs, in that they envisage a centralized exchange dealing not only with sales management but also with the supervision of potential investors.
From a strictly geographical point of view, the ICObench report identified in British Virgin Islands the leaders in fundraising, ahead of Cayman, while the United Kingdom has the primacy in numerical terms, with 9 projects presented, which however only gave him the seventh position in terms of funds raised.
One fraud leads to the other ICO
To better understand the importance of ICObench research, however, it is necessary to refer to another 2018 study, the one conducted by the Statis Group, a consulting firm that has formalized a red alert situation. The report had in fact put under the magnifying glass the ICOs conducted in the 2017 highlighting how 80% of them represented a simple scam, even though in practice 70% of the funds invested in the sector had then gone on to reward quality projects.
Statis Group analysts had also discovered that at the time of the survey 4% of the ICOs were now in a state of bankruptcy, while 3% was practically given as "dead", a definition reserved for the ICOs not listed on an exchange and that have not received any contributions on Github over the past three months.
Data that went to strengthen those listed by TechCrunch, according to which over a thousand projects had already failed at the time, 247 detected by the platform Coinopsy to which were added the 830 no longer supported virtual uniforms that had been registered by DeadCoins.
How to protect yourself from fraud?
Precisely in light of the research mentioned so far, it is quite clear that it is necessary to try to protect oneself from fraud, still very numerous in a liquid sector such as ICO. To do this, it would be enough to resort to simple precautions deriving from common sense, such as, for example, one analysis of the white paper, the document released at the start by the proposing company, aimed at understanding the technical details of the project. If they fail, put in the background by the call for amazing profits, you should start to cultivate a healthy diffidence, if not even turn offshore.
Another trick that could help to separate the wheat from the chaff is a significant one collect information on the development group of the new token. If within it there are no personalities capable of guaranteeing at the level of competence, it becomes entirely legitimate to doubt the validity of the proposal, without necessarily having to think of a scam.
Finally an aspect that is not really secondary, even if too many people when it comes to cryptocurrencies seem ready to identify decentralization and privacy with the absence of rules: to be serious, an ICO must comply with the regulations passed in this regard by the country in which the proposing company has its registered office.
In particular, the Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) procedures for the recognition of the identities of the investors must be respected.
The non-correspondence of the project with the existing laws should be considered evident proof not only of the lack of seriousness, but of the evident will to defraud the unfortunate investors.