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Home Cryptocurrency News Wall Street Journal: 15% ICO - “pure scam”

Wall Street Journal: 15% ICO – “pure scam”

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According to a recent study by the Wall Street Journal, approximately 15% of all ICO projects are “pure scam”, while many others are suspicious or obviously doomed. In these discoveries, there is essentially nothing new, but of interest are the numbers, which are more accurate this time than those obtained in past studies.

The WSJ team analyzed 3,300 ICO projects presented on sites such as ICOBench.com, Tokendata.io and ICORating.com. Experts of the Wall Street Journal, having studied the statements of startups and network transaction data, came to the conclusion that some of the projects can already be safely recorded as fraudulent ones, at least on the basis that they guarantee investment returns – this is a common trick of fraudsters and the tactics prohibited by SEC. However, no-risk investments attract many investors who rely on profits similar to Bitcoin profits.

513 projects out of more than three thousand were described by researchers as fraudulent, as they included “stealing investors’ documents, promises of guaranteed profits, and the lists of team members were missing or were false”. The operators of these ICOs refused to comment on the composition of the teams that either did not exist, or they consisted of other people, and the latter informed the WSJ that their photos were used without their knowledge. At the moment, projects recognized as fraudulent editions have already received more than $1 billion from investors.

Other typical characteristics of fraudulent projects were: whitepaper with complex, but vague explanations of investment opportunities, and websites not answering questions, but merely showing hours with the countdown of the time left to make a “life-long deal.” Many whitepapers contained whole pieces of other similar texts: descriptions of work products, roadmaps and technical specifications.

According to the latest data, the SEC has already begun to take action against at least 30 such startups.

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