Of the 902 Initial Coin Offerings (ICOs) launched last year, according to the statistics website TokenData, a total of 531 have failed so far. The capital raising by crowdfunding with own coin was indeed successful for many start-ups in 2017. But as you can see, there are also some risks for the investors in this portfolio.

In the course of the real cry for the crypto-currency Bitcoin also this unregulated method of crowdfunding became popular. In Initial Coin Offerering (ICO), start-ups circumvent some of the rules that are imposed on them by venture capitalists, stock exchanges or banks when raising capital. At the ICO, investors receive a specially issued coin in exchange for their investment whose price fluctuates.

The website TokenData lists all existing ICOs and also shows the status of each individual crowdfunding. According to NewsBTC, 59% of all ICOs failed in the previous year according to TokenData. Of the 902 ICOs, 142 have already failed in the first phase because not enough capital has been collected in advance. The remaining ICOs failed at a later date. Either the operators disappeared, fled abroad or simply closed the website and all social media channels of their project without any warning. Whether fraud (English: Scam) or not, in many cases could never be clarified, what has become in the end of the invested capital. Unfortunately, the countries of the Third World are disproportionately represented in the failed ICOs.

If you want to protect yourself as well as possible, you need to invest a lot of time as an investor in order to scrutinize the advertised project with your own hands. It is important to keep in mind that it is easy for criminals to pretend that they start a start-up business. For a scam in this area, the makers need only a minimum of technical knowledge. In addition, many projects are still anonymous, which makes criminal activities much easier. Conclusion: Anyone who wants to invest money in this very interesting area should not rely on the swarm intelligence of the other investors, but must check the facts offered themselves.

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