Topic: [2018-01-22]More than 10% of $3.7 billion raised in ICOs has been stolen (Read 124 times)
January 25, 2018, 12:16:14 PM
As far as I know some funds have been lost because of some projects that have had no intention of developing a product (SCAM ICOs) and 10% is way to high to ignore and if these statistics show an increase in lost funds this could crash investor confidence in this area of the crypto economy and might result in a decline of token sales! Hope devs take it upon themselves to do some research to avoid repeating the same mistake these past ICOs did of losing investor funds.
January 25, 2018, 08:36:20 AM
I'm pretty sure it is more than 10%
so hackers or not,consider it stolen if the people who were paying got scammed
are you trying to tell me that 90% of all ICOs are legit?
there is no way in hell all the scam ICOs paid their victims back and they
amount to at least 20-30% of all,no idea how did they count or what method they used to calculate
but from my own experience it is more than 2 failed/scam ICOs for every 10 in existance
so hackers or not,consider it stolen if the people who were paying got scammed
are you trying to tell me that 90% of all ICOs are legit?
there is no way in hell all the scam ICOs paid their victims back and they
amount to at least 20-30% of all,no idea how did they count or what method they used to calculate
but from my own experience it is more than 2 failed/scam ICOs for every 10 in existance
January 23, 2018, 02:05:56 PM
People making good profits should not be delighted to see this. Because such figures undermines the future of cryptocurrency in general and hence, there profits. The more people trust and have faith in a currency its demand, subsequently price increases. But such news hampers not just one crypto but every alt. And unless large scale regulation happens mainstream casual trader won't be involved like crypto coin developers would like them to.
January 22, 2018, 06:39:24 PM
https://www.reuters.com/article/us-ico-ernst-young/more-than-10-percent-of-3-7-billion-raised-in-icos-has-been-stolen-ernst-young-idUSKBN1FB1MZ?utm_campaign=trueAnthem:+Trending+Content&utm_content=5a65f0ba04d30141f040eb38&utm_medium=trueAnthem&utm_source=twitter
NEW YORK (Reuters) - More than 10 percent of funds raised through “initial coin offerings” are lost or stolen in hacker attacks, according to new research by Ernst & Young that delves into the risks of investing in cryptocurrency projects online.
Men talk in front of an electric board showing exchange rates of various cryptocurrencies at Bithumb cryptocurrencies exchange in Seoul, South Korea, January 11, 2018. REUTERS/Kim Hong-Ji
The professional services firm analyzed more than 372 ICOs, in which new digital currencies are distributed to buyers, and found that roughly $400 million of the total $3.7 billion funds raised to date had been stolen, according to research published on Monday.
Phishing was the most widely used hacking technique for ICOs, with hackers stealing up to $1.5 million in ICO proceeds per month, according to the report.
The research also noted that the volume of ICOs has been slowing since late 2017. Less than 25 percent of ICOs reached their target in November, compared with 90 percent in June.
The study comes amid a cryptocurrency investing craze, with young companies raising hundreds of millions of dollars online to fund their projects, with often little more than a handful of employees and a business plan outlined in a so-called “white paper”.
The challenges faced by more recent ICOs in reaching their targets are partly attributable to the lower quality of projects, as well as issues that have emerged around earlier projects, said Paul Brody, global innovation leader for blockchain technology at Ernst & Young (EY).
“The volume just exploded, people raised their fundraising goals and the quality just dropped,” Brody said in an interview.
“We were shocked by the quality of some of the white papers, we see clear coding errors and we see conflicts of interest between the companies issuing tokens and the community of token holders.”
In ICOs companies typically raise money to build new technology platforms or to fund businesses that use cryptocurrencies, also called tokens, and blockchain, the software that underpins them. Yet for many of these projects the need for blockchain and cryptocurrencies is often unjustified, according to EY.
It also noted valuations of ICO tokens are often driven by “fear of missing out”, or “FOMO”, and have no connection to market fundamentals such as project development. EY said “FOMO” has led investors to pour money into ICOs at record speeds, with the 10 shortest lasting ICOs attracting $300,000 per second on average.
The study also found several instances in which the underlying software code of a project contained hidden investment terms that had not been disclosed, or contradicted previous disclosures. For example, a whitepaper might state that there will be no further issuance of a cryptocurrency, while the code might leave that option open.
NEW YORK (Reuters) - More than 10 percent of funds raised through “initial coin offerings” are lost or stolen in hacker attacks, according to new research by Ernst & Young that delves into the risks of investing in cryptocurrency projects online.
Men talk in front of an electric board showing exchange rates of various cryptocurrencies at Bithumb cryptocurrencies exchange in Seoul, South Korea, January 11, 2018. REUTERS/Kim Hong-Ji
The professional services firm analyzed more than 372 ICOs, in which new digital currencies are distributed to buyers, and found that roughly $400 million of the total $3.7 billion funds raised to date had been stolen, according to research published on Monday.
Phishing was the most widely used hacking technique for ICOs, with hackers stealing up to $1.5 million in ICO proceeds per month, according to the report.
The research also noted that the volume of ICOs has been slowing since late 2017. Less than 25 percent of ICOs reached their target in November, compared with 90 percent in June.
The study comes amid a cryptocurrency investing craze, with young companies raising hundreds of millions of dollars online to fund their projects, with often little more than a handful of employees and a business plan outlined in a so-called “white paper”.
The challenges faced by more recent ICOs in reaching their targets are partly attributable to the lower quality of projects, as well as issues that have emerged around earlier projects, said Paul Brody, global innovation leader for blockchain technology at Ernst & Young (EY).
“The volume just exploded, people raised their fundraising goals and the quality just dropped,” Brody said in an interview.
“We were shocked by the quality of some of the white papers, we see clear coding errors and we see conflicts of interest between the companies issuing tokens and the community of token holders.”
In ICOs companies typically raise money to build new technology platforms or to fund businesses that use cryptocurrencies, also called tokens, and blockchain, the software that underpins them. Yet for many of these projects the need for blockchain and cryptocurrencies is often unjustified, according to EY.
It also noted valuations of ICO tokens are often driven by “fear of missing out”, or “FOMO”, and have no connection to market fundamentals such as project development. EY said “FOMO” has led investors to pour money into ICOs at record speeds, with the 10 shortest lasting ICOs attracting $300,000 per second on average.
The study also found several instances in which the underlying software code of a project contained hidden investment terms that had not been disclosed, or contradicted previous disclosures. For example, a whitepaper might state that there will be no further issuance of a cryptocurrency, while the code might leave that option open.
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