89% of ICO to be Unprofitable, Analyst Says

According to the director of research at The Block, IEO are starting to repeat ICO's trend
08 August 2019   2116

Leading analyst of The Block, Larry Cermak, decided to analyze the profitability of ICO projects and found that at least 89% of them turned out to be unprofitable. Nevertheless, those that showed positive returns “win big.”

Cermak praised the development of the ICO market, which peaked in 2017. He noted that the median ICO return in US dollars is currently -87% and continues to fall.

In his opinion, the collapse of the ICO market is primarily due to the different interests of investors and project founders. Unlike venture financing, projects raised money mainly from retail investors with the product in its earliest stages. At the same time, investors could not claim the assets of ICO projects.

The data on the total collection of ICO projects for all time varies - ICOBench claims that 5600 startups raised $ 64.5 billion, but other resources provide completely different data - up to $ 14 billion.

Assessing the profitability of ICOs is even more difficult, since many projects have already ceased to exist or their tokens are illiquid.

The largest aggregate fees were recorded in December 2017 - January 2018. At that time, a record number of tokensales was held.

The average amount attracted during one initial proposal according to a sample of 444 projects at Drops ICO is $ 36.2 million, the median - $ 18 million. In general, they raised about $ 14 billion, Cermak notes.

At the same time, only 10.8% of all ICOs still show a positive return, based on available data.

More than 74% of ICOs lost more than 90% in relation to bitcoin. Only 30 projects (7.7%) managed to surpass the first cryptocurrency. The top five ICOs in terms of growth in bitcoin included Binance Coin (5902%), IOTA (1744%), Ethereum (1339%), Lambda (962%) and ChainLink (668%).

In terms of the US dollar, the most profitable were Ethereum, IOTA, Binance Coin, NEO and Stellar.

In total, 11 projects demonstrated returns above 1000% paired with USD.

SEC to Accuse Veritaseum ICO of Fraud

SEC believes that project's tokensale, thru which it raised $14.8M back in 2017-2018 had a signs of scam and company misled the investors
14 August 2019   2054

The U.S. Securities and Exchange Commission (SEC) has sued New Yorker  and Veritaseum-related companies that have been caught by the agency in conducting an unregistered ICO with signs of fraud. It is reported by Cointelegraph.

According to documents published on the network, the SEC intends to hold Reggie Middleton accountable and immediately freeze the assets of Veritaseum Inc. and Veritaseum LLC.

The Commission claims that the defendants raised about $ 14.8 million through an initial coin offering (ICO) in 2017 - early 2018. At the same time, many investors were misled, as the company distorted information about the conditions of the token sale and deliberately hid some significant details.

The American regulator claims that the project still has about $ 8 million of illegally raised funds. According to the SEC, these assets must be frozen immediately.

Amid this news, the Veritaseum (VERI) rate has fallen by 70%. Now the coin is trading near the $ 5 mark, although at the beginning of 2018 its rate was approaching $ 500.

Veritaseum was created as a financial p2p platform, involving the movement of capital without traditional intermediaries. Also, VERI was positioned as a utility token for use in consulting services and access to various research works.

In 2017, Veritaseum blockchain startup fell victim to hackers, having lost $ 8.4 million from ICO investors.