US SEC unit has filed the charges against fraudulent ICO

United States Security and Exchange Commission shuts down PlexCorp ICO and files charges against the founder
05 December 2017   1876

The investors were promised 1000% revenue in under a month, the team wasn't listed due to fears of them being poached by other companies, as was stated on their ICO page, and even the founder decided to stay anonymous. All of this contributed to SEC getting a closer look at the company.

The result of investigation being ICO closure and charges being pressed against PlexCorp founder Dominic Lacroix. All the anonymity byplay was for a good reason, it seems. Lacroix is quite famous, or infamous, in Canada for multiple violations of securities law. And his recent project, it seems, doesn't benefit anyone, except himself and his partner-in-crime Sabrina Paradis-Royer. Their ICO yield was above $15 million, but the investigation uncovered, that the funds went to their pockets and were spent on home decorations and personal expenses.

The commentary from the SEC states that this case checks all the points of being a full-fledged cyber scam and is exactly the type of fraud the unit is designed to prevent.

ICOs May Allocate $24B Tokens to Themself

As reported, price of tokens, "left to cover the operating costs", reached $80B at the peak
17 January 2019   211

The total cost of the tokens that the organizers of well-known ICO projects have left to cover the operating costs and remuneration of developers at the time of release was $ 24.2 billion. At the peak, their price reached almost $ 80 billion. This is evidenced by the results of a study conducted by BitMEX together with the TokenAnalyst.

At the current illiquid rate, the assets of ICO-projects in their own tokens amount to about $ 5 billion, having depreciated by more than $ 70 billion.

However, the researchers note, this value is rather arbitrary, since the liquidity of tokens at peak levels was low. It is also incorrect to classify changes of this amount as losses because the organizers of the ICO transferred tokens into their wallets in accordance with the crowdsale conditions.

Having studied the archive of token transfers from ICO-team wallets, BitMEX and TokenAnalyst came to the conclusion that the realized profit from the sale of such tokens could be $ 1.5 billion, with the proviso that some of the tokens might not have been sold or left the wallets for other reasons .

The largest amounts of tokens in their wallets were credited by the Veritaseum and Noah project teams, which, as analysts say, looks “almost comical” against the background of real trading volumes.

Token data up to Dec 2018, data based on prices at the time(s) of issuance
Token data up to Dec 2018, data based on prices at the time(s) of issuance

This analysis highlights the lack of standards and transparency in the ICO market, especially when it comes to the allocation of tokens to the founding team’s wallet. Teams were often able to mint, burn, buy, and sell (their own) tokens at will, without analysts being able to easily track what is occurring. We would often see tokens in exchange clusters, and it was hard to tell whether the token project “paid” the exchange to list tokens or the token project just transferred their treasury to the exchange to cash out.
 

BitMEX Researchers' Report

In November 2018, BitMEX CEO Arthur Hayes said that the tokens of the largest ICO projects would collapse after entering the secondary market.