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.
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.