Amidst the turmoil of the ICO bubble boom and bust, new research by German business magazine WirschaftsWoche has found that German ICOs have lost up to 90 percent of investor capital. The report shows that German startup coin losses have increased drastically, even when compared to struggling leading coins like Bitcoin and Ethereum which are down 50 percent and 70 percent respectively since the end of 2017.
According to WirschaftsWoche, only eight startups based out of Germany have successfully completed an ICO. Of the successful German ICOs, most were operated by legally independent companies based outside of the country. One of these surviving digital coins is Naga, which despite being listed on the Frankfurt Stock Exchange, is controlled by Naga Development Association Ltd. based out of the off-shore tax haven country of Belize.
Of the handful of current coins with German-organized ICOs, only two actual German coins are still actively being traded on exchanges: Neufund and Wysker. Based out of Berlin, the former is developing a financing platform, the latter a shopping app. Other German projects like Savedroid and Iconiq Lab have lost between 40 to 92 percent of their value. Another German ICO, RedBux, which is described as a platform for the adult entertainment industry, is still afloat but isn’t listed on any credible exchanges.
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The Current Landscape of Global ICO Markets
Germany, like many other European countries, has become an increasingly unappealing market for ICOs due strict or unclear regulations put in place by federal and international authorities. Countries such as China, South Korea and Russia have gone further to institute outright bans on ICOs.
The first world’s resistance towards supporting growth and innovation through sensible ICO regulations has led many developers to base their operations out of obscure locations like Saint Kitts, Nevis, Belize, Panama, Cayman Islands, Marshall Islands, Vanuatu, Seychelles, Mauritius, the Bahamas, etc. These countries typically don’t charge any taxes on ICOs, nor do they request any details on the finances or internal structures of the company.
In the western world, Switzerland and France have expressed heavy interest in supporting cryptocurrency development and have yet take any market-ending legislative actions against ICOs. In fact, last month Switzerland announced that it would begin to ease crypto regulations even further to prevent market withdrawals, and earlier this week Swiss startup SEBA raised over $100 million to launch the world’s first cryptocurrency bank.
Leaders in France meanwhile have voiced publicly that the country aims to become the European hub for cryptocurrency innovation. In September the French parliament accepted an Initial Coin Offering framework proposed by the country’s financial market regulators l’Autorité des marchés, which is built upon a voluntary ‘ICO visa’ system to protect startups and investors.
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