SATIS Group Report: '78% of ICOs are Scams'

ICOs are a unique combination of a stock purchase and a crowdfunding campaign, and they afford investors an opportunity to support platforms they believe in.

Unlike the similarly named initial public offering, ICOs are unregulated, and investors don't acquire a share of the company in return.

Now, a report prepared for Bloomberg by SATIS Group, an ICO advisory firm, argues that the vast majority of ICOs are scams.

The company's July report determined that nearly 80% of ICOs can be classified as scams.

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

SATIS Group estimates that less than 1/10th of ICO funding went to scam projects.

The vast majority of the $1.3 billion allocated to these companies derived from just three fraudulent ICOs.

As a result, SATIS contends, 54% of ICO funding goes to projects categorized as successful.

In early July, Bloomberg reported on a Boston College study which discovered that more than half of ICOs that raise money don't last more than four months after the token sale.

ICOs remain a uniquely risky investment but with the potential for a big payoff if they are successful in the long-term.