Hundreds Of ICO Projects Turn Out To Be Empty Shell – Research
The Wall Street Journal (WSJ) conducted a study in which it found out that several hundred ICO projects are shallow and have signs of fraud, Cointelegraph reports.
The study was based on more than 3000 white papers related to the organization of the initial coin offering (ICO), which were found on the websites of ICOBench.com, Tokendata.io, and ICORating.com. The project descriptions included information on ICO issuers, technical features, a list of organizers, their achievements, and other information for potential investors.
Later, the WSJ staff analyzed all the documents, eliminating duplicates and those written in a language other than English, for which sentences with at least ten unique words were selected. Then the journalists compared the release dates of the documents.
As a result, it turned out that 16%, or 513 of such “project descriptions”, contained signs of plagiarism, personal data theft, and unfulfilled promises. The terms “no losses”, “guaranteed profit”, “return of investments”, “high income”, “no risk”, etc., were used in more than 2000 projects. Such phrases have always come under the suspicion of the US regulators, which issued regulations prohibiting their use.
Moreover, WSJ journalists tried to identify the organizers of various projects based on photos. In some of them there were no lists of team members at all, and researchers had to resort to the help of the US Census Bureau.
Earlier, Barry Silbert, the founder of the Digital Currency Group, stated that the decline in the ICO market will not prevent the growth of the crypto industry.