How can we assess risky ICOs and avoid scams?
March 28, 2018 3:09 pm
The ways for avoiding scams and fake initial coin offerings
CoinList CEO and Co-Founder Andy Bromberg said:
“The majority of ICOs are scams, but it’s still a booming business. The hit rate is very low in this industry.”
“CoinList has publicly had on our site only three ICOs out of more than 900 inbound applications.”
ICOs, which is still considered as an unregulated process of raising funds in its “modern form,” has been around for less than a year and thus are a beautiful way for start-ups to raise funds while avoiding regulations. As the price of cryptocurrencies like bitcoin went off in 2017, ICOs frequently became successful.
Bromberg said, even though major cryptocurrencies such as Bitcoin has fallen, ICOs are continuously gaining the speed. Anyhow, ICOs have already raised $3 billion in funds this year, and the first part isn’t even over yet.
Mr. Bromberg stated:
“They’re incredibly risky early-stage investments.”
“Evaluating these sales is hard, it needs a great deal of expertise. That’s expertise that very few people have because the ICO industry is so new. Regulation is coming for ICOs; there are things investors can do now to determine if an ICO is worth putting their money into. This includes evaluating the integrity of the company, the technical team and what products the company has built in the past.”
Mr. Bromberg revealed:
“In the beginning, you have to do the same team evaluation for any startup or any company you’re investing. That’s really what helps you determine if the sale will help you finance a company that builds something meaningful, or if they’re raising money for the sake of raising money and going to run away with it.”