The prominence of ICO scams is apparently much larger than previously thought, with the Wall Street Journal recently releasing a report highlighting the rampant corruption in the industry.
In a review of 1450 tokens, they found 271 that displayed elements of fraud and made highly unlikely claims. Many presented white papers that were clearly fraudulent and even copied names of team members and mission statements.
These white papers are being offered by freelancers on job websites for as little as $100, emphasizing just how cheap and easy it is to set up a convincing looking ICO.
Unsuspecting investors who haven’t practiced due diligence before participating in ICO’s have been estimated to have wasted $1 billion on fake offerings.
A Statis Group report estimates approximately $9 billion in genuine funds have been raised for ICO’s worldwide.
The SEC recently created a fake website to draw attention to the prevalence of ICO scams, designed to draw in naive investors and exhibit the ease at which such websites can be created. The SEC has released a number of previous warnings relating to projects that breach regulations and tout controversial claims such as promises of fixed returns within a time period.
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