Tag: ICO

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WSJ Finds Around 15% Of ICO Projects Examined “Questionable”

One of the main criticisms about the cryptocurrency markets is the fact that the initial coin offering (ICO) market has been wrought with issues. Of course, the fact that 2018 has been bearish plays a large role in the ICO markets, but on top of that, there has been rampant fraud in the sector, which many believe has prevented overall institutional money flow into the cryptocurrency sector.

There have been various studies, with different results, regarding ICOs and the amount of fraud/exit scams/manipulation involved in the sector. A recent investigation by the Wall Street Journal delved into the ICO sector and studied which projects might be questionable.

About The Investigation

The Wall Street Journal (WSJ) chose to investigate projects that have been evaluated on three of the top ICO websites. These websites are ICOBench.com, TokenData.io, and ICOrating.com. The investigation involved studying the whitepapers of the projects to identify potential plagiarism issues, and examining details about the team members and project, as well.

The study found that a significant portion of the projects were deemed questionable. In fact, out of over 3,300 projects – over 500 were considered “questionable”. Over half of the “questionable” projects don’t even have websites, and many are not even able to be contacted. In fact, out of the 513 projects that were deemed questionable by reporters, almost all of them offered no response.

Going Forward

Of course, countries all around the world have been trying to figure out how to regulate the cryptocurrency market so that it is not restricting innovation while simultaneously protecting the consumer. In both the United States and the UK, lawmakers have been fighting for more regulation, rather than more crackdowns.

Lawmakers in the UK called the entire sector a “Wild West”, suggesting that the sector was wildly unregulated. There are many lawmakers in the UK who want this to end immediately, in part because London could potentially become an innovative hub for blockchains startups, given the fact that it is already a global financial center.

There have been small steps forward in the United States. Most notably, two United States representatives introduced a bill that categorized cryptocurrencies as separate from “securities”. In addition, Ohio also recently announced that they were accepting tax payments in cryptocurrency, as well.

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Italy’s CONSOB Suspends Two ICOs

All around the world, countries are trying to come up with a regulatory framework that makes sense for cryptocurrency. This involves laying the groundwork for innovation while still being able to protect traders from fraudulent initial coin offerings (ICOs), which is a widespread issue that many believes is preventing the cryptocurrency markets from expanding.

Italy has recently cracked down on two ICOs that an Italian securities regulator is claiming are fraudulent. However, the ICOs were not completely shut down – but instead were suspended for 90 days, as of press time.

BitSurge

The first ICO was a project called “Bitsurge Token”. The token promised monthly returns of 6 to 13%, and was accepting capital from $1000 to $25000. There is very little information about the project, and a Youtube trailer related to the project offers very little actual insight into the project, despite the fact that it utilizes special effects and appears to sound/look a bit like a movie trailer. You can find the trailer here:

 

In advertising for the project, the text in the quick 35-second ad simply says: “Learn how the surge grows, bit by bit. Be prepared for the absolutely amazing benefit. Join the mission”, before displaying a “Bitsurge” logo and text. The comments are disabled on the video, as well.

Crypto Green Earth

The second project is Project Crypto Green Earth. In a press release, the project claimed that it was attempting a blockchain-based mapping project of Costa Rica. It stated that it would utilize drone technology to map the “8.1 million square meters of observation data inside Costa Rica”. Users would then purchase “green certificates” to designate which portions of the map that they would like to preserve.

The Italian Companies and Exchange Commission — or Commissione Nazionale per le Società e la Borsa (CONSOB), is essentially the Italian version of the American Securities and Exchange Commission, and is responsible for the suspension. Both scams originate from a company called Avalon Life, based outside of the European Union, that claims it “empowers people” and “supports the planet” on its website.

 

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India Crypto Regulation Report Officially Submitted

Asia appears to be quite conflicted when it comes to cryptocurrency markets, with some countries, such as China, outright banning initial coin offerings (ICOs), while South Korea appears to be going out of their way to encourage innovation. For example, the country recently committed $100 million into developing Seoul as a potential hub for blockchain technology. However, one country that seems to be unsure as to how it plans to regulate cryptocurrency is India, the second-most populous country in the world, and the sixth-largest economy in the world.

About The Panel

A finance ministry panel was set up over a year ago in November 2017 to discuss the issue, and it appears as though they may have finally have made some decisions. Of course, in April 2018, the global cryptocurrency community felt as though India had stifled any type of cryptocurrency-related innovation as the Reserve Bank of India called on lenders of any cryptocurrency-related companies to sever their relationships in April 2018.

The panel was created to draft the regulations for virtual currencies in the Indian subcontinent. It is also headed by Subash Chandra Garg, the Economics Affairs Secretary for India. The government put out an official statement regarding the panel that indicated that a clear regulatory framework would soon be drafted: “Thereafter the next meeting of IMC will be held so that discussion can take place on the draft report and bill. It is expected that the draft report will be placed before the IMC by next month.”

Unknown Contents

The report has been submitted – although no one knows the actual contents of the report. One of the most well-known cryptocurrency proponents in the region is Nischal Shetty, the CEO of cryptocurrency exchange Wazirx. He did not seem too enthusiastic about the prospect of a clear regulatory framework, stating: “Several times we’ve heard such stuff in the news before. Until we get to see the report I would not suggest anyone to jump to conclusions.”

There is reason for those to be skeptical. The entire global cryptocurrency community was surprised when Indian authorities arrested founders of a cryptocurrency startup, Unocoin, over non-functional ATMs, which many considered an excessive move.

In addition, should India decide to ban cryptocurrency, they might not even be successful. There are reports that the cryptocurrency ban in China is being circumvented. This is not entirely surprising, considering VPN technology could certainly help – and have been helping – investors truly engage in the cryptocurrency markets, even if they reside in a country where cryptocurrency is banned.