The Research component of the Satis Group, a cryptocurrency and initial coin offering (ICO) advisory firm, released a post which shows the number of scam projects which have been launched as ICOs since the beginning of last year.
According to the findings, a shocking 81% of the crowdfunds were identified as scams in order for the project developers to make a quick buck rather than make a lasting blockchain innovation. Although there is the massive portion of scam projects in the cryptocurrency pool, the chunk of funding towards them made up a less-tragic 11% – which is still a hefty $1.3 billion USD.
Satis Group defined a scam ICO as any project which has “expressed availability of ICO investment (through a website publishing, ANN thread, or social media posting with a contribution address), did not have/had no intention of fulfilling project development duties with the funds, and/or was deemed by the community (message boards, website or other online information) to be a scam”.
The cryptocurrency company also defined an ICO which has ‘failed’, ones which have ‘gone dead’ and ones which ‘dwindled’. Based on the given classifications and the results, Satis Group stated that “approximately 81% of ICO’s were Scams, ~6% Failed, ~5% had Gone Dead, and ~8% went on to trade on an exchange.”
The Group also released a separate, more detailed report which pointed out that three of the fraudulent ICOs which gained the majority of the $1.3 billion USD in funds “were all relatively old school frauds by no means unique to ICOs”. The report named the three key projects: Pincoin which gained approximately $660 million USD, Arisebank with $600 million USD, and Savedroid which gained around $50 million USD.
ICOs have been a bone of cryptocontention with regulators and while many countries are particularly wary of the crowdfunding method, for reasons such as these major scams, there are several nations which are eager to test the ICO water in as safe and protective means as possible.