Initial coin offerings have become one of the most popular and easy ways to raise money online through cryptocurrencies. But ICOs have also become a popular way for fraudsters to scam people as the SEC recently showed by filing suit against the ICO by PlexCorps.
ICO: A Threat to Venture Capital Firms?
Early stage startup funding has been steadily declining over the last couple of months. The main reason behind this is the rapid rise of initial coin offerings. Nowadays, many startups prefer to host their own token sales instead of seeking funding from an incubator, accelerator, or venture funding firm. One of the major advantages that a token sale has compared to traditional VC funding is that startups are not forced to give up equity in exchange for funding.
According to the cryptocurrency statistics website Coinschedule, a grand total of 234 projects have raised over $3.6 billion through initial coin offerings in 2017. Many experts believe that the ICO market is going to further grow in the upcoming years, due to the fact that more and more startups realize that it’s a better way to raise money than traditional VC funding…
Read Full: SEC Cyber Team Shuts Down Fraudulent ICO