ICOs are here to stay but an authority is needed to stamp out fraud, according to Astronaut Capital founder Matthew Gibb in a research interview with FinTech Global.
ICOs and cryptocurrencies have seen an unprecedented year in terms of funding with the record token sale being broken three separate times within three months, according to data FinTech Global. There are hundreds of ICOs taking place, making it hard for investors to keep up, Dibb said. Having such a wide spread scale up and the pace which they are growing, has left the sector open for people to take liberty with this and con people with fake sales.
Dibb said, “ICOs will always have a place in the market, just not on the scale in which they are currently portrayed.”
While there has been a huge rise in ICOs and the capital they are raising, some countries have not been keen on their uptake. China and South Korea have both banned ICOs for now, as they are rife with fraud and want them to become much more regulated. There are other countries that also see the token sale problems, with Japan, Russia, Singapore and Mexico said to be exploring regulations for ICOs and cryptocurrencies.
“We acknowledge that there are token sales out there which are taking advantage of investor sentiment and are purely an exercise of personal capital gain. It’s for reasons like this that in such a decentralised market, there needs to be an authority that people can rely on to separate the real commercial opportunities from the fakes,” he said.
“It’s for this exact same reason that we started Picolo Research to provide such transparency. Our view is that people will continue to enter the ICO market for speculative gain, so they may as well rely on such safety nets as Picolo Research and Astronaut that spend countless hours on due diligence for this exposure.”
Astronaut is an asset management platform which is focused on verified and researched opportunities in the blockchain market. The company allows retail and institutional grade investors to contribute to verified pre-sale ICOs, upcoming listings and undervalued liquid exchange traded tokens. Through the platform a user has access to range of insights regarding the token sales and a portfolio recommendation. This provides users with due-diligence-backed methodology to help avoid boom and bust cycles.
Earlier this year the company merged with independent blockchain research platform Picolo Research, to help creating a hub for ICO investment. Picolo offers transparent and verified coverage each week to more than 12,000 investors, helping them with their trade decisions.
Astronaut Capital’s mission is to help ensure the ICOs are safe and are a legitimate sale, therefore protecting investors from scams. Despite this there is no guarantee everyone will be protected from fraud cryptocurrencies. Dibb argues there needs to be regulations put in place to curb them; however, the difficulties lie in implementing these processes. One-way companies are countering the fake ICOs is through self-regulation.
Dibb said, “Without some type of a global regulatory framework, ICOs will not go away. Regulatory authorities are taking steps to limit new token sales, however the dynamics of this simply won’t work due to the way in which it was created – decentralised. Successful ICOs are already ‘self-regulating,’ implementing disclaimers, licensing, KYC and more. This is slowly becoming a standard in the market, and as with any new market which attracts a lot of attention, there is a period in which pieces of the puzzle naturally fall into place due to the market and landscape becoming more mature.”
Earlier this year, end-to-end blockchain infrastructure solution platform Block.One broke the ICO funding record, having picked up $185m, and doing so within just five days. This record was then beaten a week later by bolockchain-based transaction security platform Tezos closing its ICO on $232m. In September the figure was broken by data storage system Filecoin’s token sale ending on around $257m. Outside these three deals, the next biggest ICO is KyberNetwork, which pulled in $56m also in September.
Last month the company launched its own ICO, with it managing to raise $1m within less than 24 hours. The token sale, which is still live until the 26th October, is looking to sell between 15 million to 20 million. Tokens holders will gain access to performance distributions each month which is based on buy and sell activity of astronaut, as well as representing an exchange tradeable and correlated to AUM of its holdings. The proceeds of the sale will be used to facilitate the investment activity of the company.