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1 out of every 5 ICOs is a scam, WSJ research reveals

 

In a market that’s nonetheless largely a wild frontier, it’s nearly an expectation to discover a number of scams right here and there.

A latest analysis by the Wall Street Journal of 1,450 ICOs discovered that these scams are widespread. The newspaper discovered that 271 of the choices had crimson flags that might point out untrustworthiness.

WSJ’s methodology contains trying particularly for copy-pasted whitepapers, outlandish guarantees reminiscent of ensures of returns, or something that’s “off” about govt employees (reminiscent of no itemizing in any respect or a pretend itemizing of those who don’t have anything to do with the corporate).

In a single such instance, WSJ introduces us to a “Jeremy Boker:”

“Jeremy Boker is listed as a co-founder of Denaro, an online-payment mission. In investor paperwork for a public providing in March, which claimed to have raised $eight.three million, Mr. Boker boasted of his cryptocurrency startup’s ‘powerhouse’ group. In his biography, he famous a ‘respectable historical past of joyful shoppers’ in consulting earlier than he launched Denaro.”

The issue is that Boker doesn’t seem to exist in any respect. The picture used to signify him was a inventory picture. The entire group seems to be fictitious creations which can be a figment of the scammer’s imagination.

What’s extra, the journal discovered that greater than $1 billion in funding was raised in these 271 pretend ICOs out of the $5 billion complete in its evaluation.

It’s essential to notice, nonetheless, that the quantity of fraudulent ICOs in 2018 has decreased compared to final 12 months’s numbers. This will not eradicate the likelihood of scams, however escrow holdings may assist decrease their impact over the long term.

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