Report: More Than Three-Quarters of ICOs Were Scams

About half of the existing crypto-asset market today - numbering some 1,500 - functions on top of an existing blockchain like ethereum, according to a new report.

In looking at the "Market share" of those platforms, it's perhaps not surprising that ethereum constitutes the bulk of that figure - some 86 percent - followed by Waves at 2.9 percent and NEO at 2.3 percent.

For all of the growth around these crypto-assets, the report also came to a troubling conclusion: the vast majority of ICOs launched to date have proven to be fraudulent in nature.

The report calls them "Identified Scams" - that is, projects that "Did not have/had no intention of fulfilling project development duties with the funds, and/or was deemed by the community to be a scam."

"On the basis of the above classification, as a percentage of the total number of ICOs, we found that approximately 78 [percent] of ICO's were Identified Scams, ~4 [percent] Failed, ~3 [percent] had Gone Dead, and ~15 [percent] went on to trade on an exchange," the report states.

A recent report from a team at Boston College similarly found that more than half of the token projects they examined fell into inactivity within four months of the sales.

That figure actually drops to a minute 0.3 percent when you cut out the three biggest scams - Pincoi, Arisebank and Savedroid - that have been identified.

The report also details how many projects have been seeking sunnier shores, so to speak, in terms of finding more appealing regulatory environments.

The number of ICO fundraising projects based in the Cayman Islands rose from a reported 3% to 40% in the last year while the U.S. faced a sizeable drop from 32% to 10%. Hinting to subsequent reports yet to be published by Satis Group, author Sherwin Dowlat wrote that a more comprehensive analysis into the "Wide variety" of regulatory approaches taken by states within the U.S. specifically would be provided "In a subsequent note."

This being the second in the research series, Satis Group is set to publish three more reports all aimed at delivering "a comprehensive understanding of the pillars that comprise the crypto-asset universe."