New Research: 10% of Funds Raised in ICOs Lost or Stolen


Close to $400 million USD raised from initial coin offerings have been lost or stolen, a new research has found. The embezzled funds constitute more than 10% of what had been collected for the projects covered by the study. Meeting fundraising goals is getting harder for companies conducting new ICOs.

300 Grand per Second…

More than 370 ICOs from around the world have been studied by Ernst & Young. The multinational professional services firm explored the “big risks” in the ICO market. The surveyed initial coin offerings raised a total of $3.7 billion USD, a tenth of which has disappeared, including due to hacker attacks.

Flawed token valuations, unclear regulations, heightened hacker attention and congested networks have been mentioned among the risks. According to Ernst & Young, phishing is the most widely used technique by hackers.

Fear of missing out drives token valuations without any connection to market fundamentals, the authors point out. Investors in the 10 shortest lasting ICOs have been contributing capital at an average speed of over $300,000 per second.

Not What It Used to Be

The ability to meet fundraising goals, however, is declining, according to the study. Only a quarter of the ICOs reached their targets in November last year. The share of the successful coin offerings had been 90% in June 2017.

With more than $1.03 billion raised from ICOs, the US is a pronounced leader among host countries. China is second with $452 million, Hong Kong included, and Russiaplaces third with $310 million USD.

More than 70% of the ICOs included in the study were based on Ethereum. Ernst & Young have collaborated with Group IB for the research. Data has been collected through public sources, including cryptocurrency exchanges, ICO reports, news sites and dedicated social media.


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