High Profile Players’ Doubts Over Credibility of ICOs

High Profile Players’ Doubts Over Credibility of ICOs


General market sentiment in relation to ICOs presents a mixed picture. Public figures such as Warren Buffet have dismissed ICOs as a fraud whilst others have given their full-backing to specific ICO projects like Mark Cuban in the case of eSports ICO, Unikrn.

Venture capitalist Jason Calacanis who has invested in more than 150 successful startups, and who claims that ICOs are dump schemes that represent nothing more than white-papers without viable products and strategies recently wrapped himself up in a spat with fellow venture capitalist Fred Wilson who countered that attempts to dismiss ICOs as credible business models ultimately leaves Silicon Valley and the rest of the US vulnerable to experiencing creative flight to other areas of the world which offer more accommodating environments for ICO ventures.

Europe Aligns with the US

Key European figures – including regulators – appear to be adopting a similar attitude vis-à-vis the ICO phenomenon as their American counterparts.

The European Securities & Markets Authority (ESMA) has launched a series of high profile warnings in recent weeks, highlighting the risks associated with ICO operations, particularly in relation to a lack of a formal regulatory framework for the ICO investment model.  The biggest concern is that many ICOs are unlikely to fall under the remit of current legislation within the Eurozone, consequently leaving investors vulnerable. 

Buterin Criticises ICO Model

Ethereum co-founder Vitalik Buterin has also been very vocal and indeed categorical in relation to the ICO fund-raising model. That may be perplexing to some given that the ICO spurt of 2017 is regarded by many as the principle reason for the upward momentum in the price of Ethereum that has been witnessed over the course of the year. 

In a recent statement Buterin pointed criticism at a series of ICOs which ran in October, during which he underlined that some of the most successful Blockchain-derived business models were non-ICO in nature, citing amongst others the case of EtherDelta which raised tens of millions of dollars through traditional methods and has since acquired a sustainable and profitable model.

No Clear Direction

As things stand, however, despite moves by both China and South Korea to ban ICOs, European and American bodies remain more ambiguous in their stances, preferring to warn investors away from crowd-funding mechanisms that endeavour to stay outside of their remit as opposed to opting for outright bans. 

The general ambiguity, however, has had yet no perceptible impact in the growth of numbers of both individuals and – increasingly – informal groups of investors to take an interest in developments within the ICO arena.