Many companies use Initial Coin Offering, ICOs, for capital-raising process required by venture capitalists or banks. Infamous penny stockbroker Jordan Belfort, much better referred to as the ‘Wolf of Wall Street,’ has reaffirmed the claim of his that ICO is “the biggest scam ever.” Earlier this year, he claimed that Bitcoin is a fraud.
ICOs are becoming well known to investors around the world over the past 12 months as a result of their increased earnings for early investors. Lately, indicators have emerged that some ICOs may be much too great to be real. But they are proving unpopular with governments around the world.
Belfort reported that a tiny minority of ICOs are complete scams.
“Promoters [of ICOs] are perpetuating a massive scam of the highest order on everyone. Probably 85 percent of people out there don’t have bad intentions, but the problem is, if five or 10 percent are trying to scam you, it’s a f**king disaster. It is the biggest scam ever, such a huge gigantic scam that’s going to blow up in many people’s faces. It’s far worse than anything I was ever doing.”
Despite Belfort’s case, nonetheless, a few electronic currency community members believe differently. They say ICOs might be the potential future of venture capitalism and fundraising. However, the Chinese and South Korean governments have shut them down. On other hand, US regulators have issued a warning that ICO may be subject to securities laws.
Are ICOs fraud?
Despite the assertions by several people of the virtual currency group that lots of ICO are “fraudulent,” the ICO fundraising design continues to be successful as a technique of raising brand new capital.More than $3 billion has been raised by 202 ICOs in 2017, is confirmed by CoinSchedule.A considerable number of ICOsp projects have focused on one thing. that is technical development for industries like entertainment, finance, and data storage. Most of the tasks funded by ICOs have centered on the development of technical ways. These include some industries as financial, data storage, and entertainment.
The talk of the town of 2017 in cryptocurrency market was ICOs phenomenal growth rate. Only recently, the complete digital currency market capitalization arrived at a record high of $172 bln, up from only $12 bln in 2016.