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Ethereum [ETH] remains the king space in the industry; 2017 ICO-scene was a fail, implies an EY report

Priyamvada Singh

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Ethereum [ETH] remains the king space in the industry; 2017 ICO-scene was fail, implies an EY report
Source: Pixabay

In a recent report published by Ernst & Young – one of the leading accounting firms in the world, it has been observed that most of the cryptocurrency projects funded in 2017 through ICOs [Initial Coin Offering] did not experience success in the markets since their listing in the markets. Anna Irrera, a Fintech researcher and writer, in one of her latest Tweets stated:

“Almost 1/3 of all cryptos financed through ICOs in 2017 have lost “substantially all value” and 86% trade below listing price – EY
71% still have no product. Of the ones that do, some have started accepting fiat, or abandoned their own token”

In the report, EY had analyzed and studied 87% of the total ICO funds, covering the top projects that conducted these ICOs. The research found out that most of the projects posed high risks in regards to fraud and theft. There was also major dubiety on the accuracy of the claims made by the projects in their Initial Coin Offering.

The financial auditing firm also conducted a similar study in December 2017. This analysis is a follow up to the previously published report last year.

EY report on ICOs | Source: EY LinkedIn

EY report on ICOs | Source: EY LinkedIn

A flash warning was evident in the research wherein EY stated that investors with a portfolio dominated by 2017 ICOs are already in around 66% loss today. The report also mentioned:



“Of the ICO start-ups we looked at from The Class of 2017, only 29% (25) have working products or prototypes, up by just 13% from the end of last year. Of those 25, seven companies accept payment in both traditional fiat currency (dollars) as well as ICO tokens, a decision that reduces the value of the tokens to the holders.”

On a more profitable stance, it was observed that only 10 ICO tokens ruled most of the total profits made via the ICOs held in 2017. Most of these ICO projects are related to the development in the blockchain infrastructure field.

However, Ethereum still remains the king space for most of the projects to be built in the blockchain industry, as the new projects have failed to overpower the dominant success of the Ethereum blockchain.





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Priyamvada is a full-time journalist at AMBCrypto. A graduate in Journalism & Communication from Manipal University, she believes blockchain technology to be a revolutionary tool in advancing the future. Currently, she holds no value in cryptocurrencies.

Altcoins

FLiK case: Utility tokens take another hit in case allegedly involving Rapper TI, claims prominent lawyer

Priya

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Source: Unsplash

Stephen Palley, a prominent lawyer at Anderson Kill, spoke out about the FLiK token case via his official Twitter handle. Notably, unlike most tokens in the space, FLiK made headlines because of its celebrity backing.

Towards the end of last year, it was reported that the US Rapper Clifford Joseph Harris Jr., who goes by the stage name T.I. and T.I.P., was sued for $5 million over the alleged failure of the token promoted by him and his partner, Ray Felton. The rapper was being sued by a group of 25 individuals who claimed that that they invested around $1.3 million in the tokens.

Additionally, there were allegations that the rapper used the raised money to increase the token’s value, following which the duo sold their holdings after the coin crashed. Other well-renowned celebrities such as Kevin Hart and Mark Cuban were also reportedly associated with this project.

On the recent developments surrounding the case, Stephen Palley stated,



“Utility tokens” take another hit in case allegedly involving rapper TI. Court says FLiK ICO tokens = securities under Howey Test, for motion to dismiss purposes. That they offered some functionality ≠ relevant given buyers’ expect of profits solely from efforts of others. 1/4″

Source: Twitter

Source: Twitter

Source: Twitter
The lawyer further stated that,”use of funds” was already determined by the defendants, “per the FLiK token whitepaper.” He went on to state that there was a time problem, adding that Federal Law rules that “unregistered sale” of security tokens were supposed to be reported within 12 months after the violation.

The lawyer concluded by tweeting,

“ps — form was never going to be exalted over substance, so none of this is a huge surprise. Also, this is a ruling on Rule 12(b)(6) motion to dismiss so the Court takes the allegations as true for purposes of ruling. The merits still have to be litigated.”





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