ICOs Raised 95% Less in January 2019 Than in Their Best Month, Data Shows

Omar Faridi
  • ICOs are not receiving as much capital as they did during the crypto bull market of 2017.
  • However, ICOs are still performing better than what they did January 2017.

Investments in initial coin offerings (ICOs) have dropped by nearly 95% according to data from cryptocurrency analytics firm Coinschedule.

In March 2018, ICOs raised over $5.8 billion, however Coinschedule reported the popular fundraising method attracted only $291 million in total investments during January 2019. Although ICOs have not generated as much capital as they did when blockchain project valuations were a lot higher, Coinschedule pointed out that ICOs still raised over 70% more funds last month than they did in January 2017.

When compared to the time period during which cryptoasset prices hit record-level highs in late 2017 and early 2018, the ICO market has slowed down considerably. Coinschedule’s data shows there were less than 50 ICOs launched in the first week of January 2019. Moreover, the ICO ecosystem received only $6 million in total investments from 424 different public token sales tracked by Coinschedule. Significantly, this is the smallest amount raised by ICOs since 2017.

$1.4 Billion Raised From ICOs In Q4 2018

As CryptoGlobe reported last week, ICOs netted 25% less in funding during Q4 2018 when compared to Q3 of the same year. This, according to data from ICOBench which also revealed in the same crypto market report that there were 594 ICOs completed in Q4 2018. During the previous quarter, 554 ICOs were successfully conducted (as they managed to reach their fundraising target).

Data from ICOBench revealed that $1.4 billion was raised by ICOs in Q4 2018, while Q3 of last year saw public token sales generate $1.8 billion - according to ICOBench.

As covered, a study conducted by Satis Group found that more than 80% of ICOs launched in 2017 were scams. However, the fraudulent token sales only managed to attract 11% of total investments made in ICO projects (during 2017). According to Satis Group’s report (published in July 2018), approximately 70% of the funds raised by ICOs went towards helping legitimate crypto and blockchain-related projects.

Security Token Offerings (STOs) Provide Regulated Investment Options

In December 2018, Jerry Ji Guo, a Chinese-American who previously worked a journalist for the New York Times, was charged for his alleged involvement in a $3.5 million ICO-related scam. Guo is now facing up to 20 years in prison as he was found guilty of orchestrating fraudulent schemes in which he stole large amounts of cryptocurrency from blockchain startups that had employed him as a consultant.

Due to the large number of scams orchestrated under the guise of ICOs and the lack of proper regulations for the crowdfunding method, many companies have introduced security token offerings (STOs). These are regulated token offerings that allow investors to acquire cryptoassets which are tied, or backed by, real-world assets such as stocks, debts, commodities, and real estate.

Those Banned From Facebook May Not Be Able to Use Its Cryptocurrency Libra

Facebook’s two days of congressional hearings on the social media giant’s cryptocurrency ambitions seemingly revealed that those who have been banned from Facebook may not have access to Libra.

During the congressional hearing Facebook had to answer some tough questions, and one of them came from Representative Sean Duffy, which asked the company’s cryptocurrency head, David Marcus, who’ll have access to Libra.

The Congressman initially asked Marcus who could use the cryptocurrency, to which Calibra’s CEO answered: “anyone that can open a Calibra account, that can go through KYC [know-your-customer checks] in countries where we can operate.”

Duffy then referenced two individuals banned from Facebook for violating its community guidelines, Louis Farrakhan and Milo Yiannopoulo, and asked whether they’ll be able to use the social media giant’s cryptocurrency.

Marcus ended up replying he doesn’t “know yet,” after seeing Duffy hold a $20 bill and ask hin who can use it. His point was that cash doesn’t discriminate, and that anyone who can hold it can use it.

While throughout the hearing Marcus tried to point out the company will follow appropriate regulations and comply with lawmakers, Duffy responded that a proper answer would be “as long as you abide by the law, you can use Libra.” The fact he didn’t get this answer, Duffy said, gave him “great pause.”

Speaking to The Daily Beast Elka Looks, a Facebook spokeswoman, clarified Marcus addressed the Congressman’s concerns later on in the hearing. She stated:

For Libra, anyone who is engaging in lawful activity will be able to transact on the network. Facebook will have no say. For Calibra, there is no policy in place yet, but we will share it when it is closer to being finalized.

The news outlet adds that Calibra, Facebook’s wallet to send, receive, and hold Libra, doesn’t yet have final terms of service or a privacy policy. All of this means that those who’ve been banned on Facebook may not have access to its cryptocurrency.

As CryptoGlobe covered, Congressman Warren Davidson implied during the hearings Facebook’s crypto is a ‘shitcoin’ as it doesn’t have some of the properties bitcoin has. The Congressman made it clear bitcoin has no central authority that can censor transactions or dilute its value, while Libra has the Libbra Association.