ICOs thrive despite clampdowns
However, despite a general clampdown on ICOs by governments and central banks across the globe, along with a dramatic increase in exit scams phishing attacks, and all manner of fraudulent ICOs, that number has been topped already, in the first three months of 2018 alone.
An estimated $6.3 billion (£4.5 billion) has been raised by ICOs in 2018 and, with nine months left of the year, 2018 looks set to double, triple, or even quadruple 2017’s grand total. There’s more can be deduced from the recent data too.
For example, it is not the sheer amount of ICOs of being launched that has increased; it is also the average size of each one. There’s been exponential growth, which is surprising given the flurry of cease and desist orders issued by the SEC, along with other governmental agencies around the world, in the last few months.
Indeed, many believe this controversial method of fundraising will soon be extinct. However, evidently, the numbers tell a different story.
It would be obtuse to report on 2018’s ICO funding total with out at least mentioning the elephant in the room. That is, Russian messaging app Telegram’s earth shattering ICO which, after two rounds of private token sales (with rumours of a third), has raised an astonishing $1.7 billion (£1.2 billion) alone.
Telegram’s staggering bouts of private investments, of course, makes up a significant portion of 2018’s total, thus far.
However, it’s worth noting that, even excluding Telegram’s sizeable contribution to the cause, so to speak, the total money raised via ICOs in 2018 would still make up 85% of 2017’s total, some $4.6 billion (£3.3 billion).
The SEC has taken a much harsher stance on ICOs during the first quarter of 2018, with chairman Jay Clayton stating at a Senate hearing which took place in February: “Ever ICO I’ve seen is a security.”
If a token sale is, in fact, selling securities to investors then they must, by law, be registered with the SEC and face harsher scrutiny along with tighter regulations.
Boxing champ Floyd Mayweather was recently involved in the promotion of a controversial ICO, founded by Centra. In April, the regulator charged them with fraud.
Despite all this, investors and entrepreneurs alike seem undeterred and, as such, ICOs continue to grow in popularity.