Beyond the ICO Part 1: Adapt or Die

In this three-part series, CryptoSlate will assess the current state of the ICO ecosystem, analyze the regulatory shift that is making the "Traditional" ICO model untenable and take a look beyond the ICO at the future of a decentralized capital generation.

The rapid development of blockchain-based crowdfunding has resulted in a series of successful platforms such as NEO, Storj and even Ethereum; however, the speed in which ICOs propelled into the international crypto market has made it nearly impossible for regulators to create nuanced, regulatory frameworks that are able to protect investors from scammers and fraudsters.

The total lack of oversight within the ICO ecosystem has resulted in swift and furious action from regulatory bodies around the world, and with research hinting toward prolific fraud in the ICO market, countries like China and South Korea have completely banned ICOs.

With the SEC hinting toward further crackdowns on the ICO model, it's becoming apparent that the window of opportunity in which entrepreneurs are able to generate hundreds of millions in unregulated startup capital is rapidly drawing to a close.

Data published in July by ICO advisory firm SATIS Group also reveals high levels of fraud present in the ICO industry.

The Wall Street Journal has previously reported statistics that indicate up to 20 percent of all ICOs are fraudulent in nature; however, STATIS maintains that nearly 80 percent of ICOs can be classified as "Scams."

In 2018 alone, the cryptocurrency community has been rocked by a score of ICO exit scams that have separated investors from more than half a billion dollars in invested capital.

The Vietnamese cryptocurrency platform Modern Tech launched an ICO called "Pincoin" that defrauded investors of nearly $660 million in April.

With investors warier than ever before, and regulators poised to take drastic action, the ICO model as it existed in 2017 is dying.

In part two of CryptoSlate's "Beyond the ICO" series, we'll examine the regulatory response to the ICO crisis and how regulators plan to address growing concerns regarding unregulated crowdfunding events.