While the ICO industry is seemingly firing on all cylinders, the risks have not diminished by any means. In fact, it seems this situation has only become worse over time. With the mounting number of scams and defunct projects, it is evident something will need to change in the very near future.
ICOs Need to Rethink a few Things
No one will deny that the ICO industry is very alluring. Dozens of innovative projects are launching every single week, although it remains to be seen whether or not these projects can succeed in the long run. As such, the risks for investors are quite significant and need to be taken into account at all times.
While most of the ICO projects on the market have nothing but honest intentions, their technical prowess may not be sufficient to turn them into successful ventures. More specifically, a fair few projects fail simply because they could not deliver the promised goods. While that in itself is not necessarily surprising, one would expect companies raising millions of dollars to be successful in one way or another.
To make matters worse, there is a growing number of ICO scams to contend with as well. Scams and fraud are making their mark on the industry as a whole, which is not good news for any project active in this industry. A fair few token sales are pure money grabs first and foremost, with no intention of ever building a project or infrastructure.
All of this has attracted a lot of attention from regulators all over the world. For its part, the SEC is actively cracking down on ICOs right now, which can only be considered a good thing. Other countries are also taking harsh action against initial coin offerings and the risks they represent. Rest assured that type of scrutiny will not be slowing down anytime soon.
The bigger question is how all of these concerns can be alleviated in the future. There needs to be more ICO transparency and accountability in general. Achieving such a goal is pretty much impossible using the tools we have today unless all ICO creators suddenly adopted a completely different mindset. That seems rather unlikely, as it is not necessarily in their best interest to pursue this option.
Even so, a self-regulatory approach could still work out fine for the ICO industry as a whole. Assuming projects want to look into this option in the future, self-regulation seems to be the right course of action moving forward. Whether or not we will ever see an effort to impose self-regulation upon the ICO industry remains to be seen. It is evident all other solutions clearly aren’t working as of right now.