According to new research from Wall Street Journal, more than 15% of cryptocurrency projects that raise funds through ICO services show signs of serious danger that will stop investors.
The investigation, which analyzed white papers of 3,300 pre-encrypted services and ICO, showed that 513 of them were able to commit plagiarism, misrepresenting the identity of the person founding projects or promising unrealistic profits.
The significant amount of pre-coding projects is suspicious.
Wall Street Journal examined the white papers of all 3,300 projects which are listed on ICOBench.com, Tokendata.io and ICORating.com. In order to identify plagiarism, reporters compared sentences in all reports to find duplicates, and reporters identified more than 10,000 sentences that appeared many times.
The lack of details or scams, founders or sponsors has been a dangerous sign for illegal cryptocurrency projects for a long time.
Reporters approached all 513 dangerous services to comment on these findings. But very few can contact or choose to answer.
Are the results surprising?
The Wall Street Journal’s results are hardly surprising when giving the recent reports on the ICO market, the close monitoring of regulatory agencies, and increasing measures against the service.
The US Securities and Exchange Commission (SEC) has been conducting an increasingly tight control program for ICOs
Does it have a change before 2019?
SEC president Jay Clayton has received criticism in recent weeks that his harsh approach is limiting innovation. There is a hope that the balance can be found in 2019. Credible projects will continue to innovate, and the consideration of scam services will develop.
With increasing attention from managers, pre-coding startups have left the ICO and sought funding through traditional ways for private financing. Others are looking for a new model, providing security tokens (STO).