“Red flags” were found in approximately 19% of ICOs, a Wall Street Journal research says, reported Cointelegraph on May 17.
The WSJ conducted a study on 1450 ICOs and found out that 271 of them were using a “deceptive or even fraudulent tactics.”
The malicious tactics ranged from falsifying whitepaper and finances data to providing fake information about the startup’s location and leaders.
With lawsuits and regulators, some suspicious companies have already shut down and the total loss funds of customers are worth approximately $273 million.
The US Securities and Exchange Commission (SEC) is working hard to catch the fraudsters that are raising money through ICOs as the rate of expansion of ICOs throughout the world in 2018 continues to grow.
Earlier in May, Binance CEO, Chanpeng Zhao talked about ICOs in a positive tone saying that “raising money through ICOs is about 100 times easier than through traditional VCs.”
“I still receive phone calls and SMS telling me I won a grand prize, but I need to make a bank transfer to someone first. Does that mean we should stop using phones, SMS, and banks?”