The Cryptocurrency industry continues to be plagued with digital issues such as fraud prevention which is almost non-existent in the current world market. A new study suggests that 20% of projects within the cryptocurrency sector are scams. Furthermore, the sector has experienced a huge amount of growth since it’s initial rocket-style launch in popularity during the year 2017. As someone who has worked intimately with the cryptocurrency space for the last year and watched initial coin offerings go from the obscure corners of the internet to the mainstream, I’d say the percentage of projects that are scams has only risen in recent months. Many people saw the immense levels of money these initial coin offerings were rising and the space, therefore, attracted many from the get rich quick camp.
Reports show that even with high levels of ICO fraud existing in the marketplace today that the investors are still reacting extremely bullish to the space. This may be true due to the huge amounts of gains some investors have seen from their projects. For example, EOS was trading at nearly ½ dollar this time last year and now sits at nearly $6 per token with a high of nearly $20 having come and gone earlier this year. This provides just one example of the huge returns investors have seen in the last year from the initial coin offering market. Furthermore, this illustrates greatly, while taking account of the fraud and investments which are successful investors have still seen a very impressive ROI from projects in the space.
An Astonishing amount of fraud in the initial coin offering space.
The world has been infected with hundreds, if not thousands, of straight out ICO scams. With exit scams being the most common, in which a project promises to do some great task or business model only to disappear with the funds once they’ve been raised. This is disappointing but also not a huge surprise considering the initial coin offering market operates exclusively online and in an under-regulated marketplace. As the Securities and Exchange Commissions from around the world start to crack down, enforce existing security laws, and therefore hopefully deter others from trying these scams. Remember too, even with the high amount of fraud in the initial coin offering space, investors are still seeing great returns with regards to the projects that are legitimate.