The Crypto Valley Association and PwC have published a study on ICO and STO that takes into account data from the first quarter of 2019. The study claims that in the course of this period 250 token sales have brought their initiators $3.3 bln.
IEOs are a ‘fundamental change’
The report states that the highest profits were made by the Bitfinex exchange and GCBIB - $143 mln. These two make up 35 percent of the totally raised amount this year.
The previously popular ICO model seems already to be abandoned after bringing its creators huge amounts of money in 2018 ($19.6 bln) and earlier (all ‘titans’ of the crypto industry, such as Ethereum, Binance, Tron, etc, started off from ICO fundings).
This year a similar investment model turned into Initial Exchange Offerings (IEOs), similar think conducted by crypto exchanges, where the latter study candidate projects carefully and provide a sort of a guarantee to investors that the projects are serious and are not scams.
One of the first platforms to start this was Binance with the successful BitTorrent IEO early this year. In the report, the writers refer to IEOs as a fundamental change.
“[The IEO fenomenon] emphasizes a higher degree of institutionalization of large crypto exchanges around the world as cornerstones of the global Crypto Finance infrastructure – and may also be seen as a response to established exchanges moving into crypto.”
As well, as IEO, the report deals with STO – Security Token Offerings.
Security concerns
The report speaks of the new IEO and STO trends as rivals of traditional IPOs. However, the authors are putting an emphasis on the issue of cybersecurity and regulatory actions, such as AML, KYC.
Rules being implemented by the FATF require that token sale platforms implement the above mentioned procedures at a more serious level.
Alex Dovbnya
Denys Serhiichuk
Arman Shirinyan