Report: ICOs Raised $118 Million in Q1 2019, Over 58 Times Less Than in Q1 2018

About $118 million has been raised via initial coin offerings (ICOs)

in Q1 of 2019, over 58 times less than $6.9 billion, the amount raised during the same period in 2018, the Wall Street Journal (WSJ) reports on March 31. The report cites data provided by ICO analytics website TokenData. The WSJ argues that investors have been scared off by regulators’ actions against non-compliant ICOs, as well as by the general bear market over the past year. One of the latest cases happened in February, when the United States Securities and Exchange Commission (SEC) charged crypto firm Gladius Network with selling unregistered securities after the company self-reported to the commission.

Last month, founding partner of Future Perfect Ventures, Jalak Jobanputra, claimed that venture capital valuations have also been deeply affected by the cryptocurrency bear market. The recent report also reveals that of the 2,500 projects that TokenData tracked since 2017, purportedly only 45 percent successfully raised money. Furthermore, WSJ also cites TokenData as saying that only 15 percent of tokens issued in successful ICOs are trading at or above their original price. The article cited attorney and consultant Joshua Ashley Klayman as stating that ICOs themselves may disappear, but the market for digital securities won’t. Recently, so-called security token offerings (STOs) have received increased attention from both the private sector and government regulators globally.

In the U.S. context, investors are faced with a patchwork regulatory landscape when it comes to tokens sales. In February, the state of Wyoming passed a blockchain tokenization-related bill, while a similar law was passed in Delaware in September 2017. This week, Cointelegraph reported that the owner of a startup that ended up canceling its ICO was trying to sell the company on eBay for $60,000. The startup, named “Sponsy,” is described as a blockchain project that is fully prepared to launch both an ICO and an STO.

Article Produced By
Adrian Zmudzinski

Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.

https://cointelegraph.com/news/report-icos-raised-118-million-in-q1-2019-over-58-times-less-than-in-q1-2018

David https://markethive.com/david-ogden

Research: Ethereum-Based Prediction Market Augur Currently Faces a Design Flaw Attack

Ethereum-based (ETH) prediction market Augur is currently facing a design flaw attack,

according to research by cryptocurrency exchange Binance released on April 1. The aforementioned attack involves a controversial market described as betting on the price of ETH at the end of March, which expired on April 1, 2019, 1:59 AM (UTC +8), a few hours off from the actual end of March 31. Since the contract expires before that tie, it may be deemed invalid in what Binance researchers call a design flaw attack. The market has also been reportedly wash traded by a few wallets, presumably to inflate the volume.

Reddit users had already brought up this expiration issue on March 20, with Augur core developer Joey Krug noting at the time that the crypto community had exaggerated the scope of the scam, while admitting that a safeguard against such activity is currently malfunctioning and should be updated in Augur version 2. According to Binance research, the attacker also reportedly sent a limit sell order for the more realistic outcome (that the price will be between $100 and $1,000) “at a quote that is above what would be rewarded by an invalid result, but quite below that which an unsuspecting participant may consider as a good deal” in order to lure in a newcomer.

If the market is deemed invalid, then all users that contributed will see their shares valued at one-third of their initial value. The report also further notes that the market — already covered by Cointelegraph — “Which party will control the House after 2018 U.S. mid-term [sic] election?” was another instance of such an attack. This market, which reportedly exhibited a total volume of more than $2 million, featured a market settlement date was on Dec. 11, 2018, while the change in the U.S. house was effective as of Jan. 3, 2019.

In this case, users did not deem the market as invalid and settled for the Democrats’ win as the outcome. The research also suggests potential solutions to the exploitable nature of Augur’s mechanics, such as a price-based refunding mechanism, clearer references and market validators with non-trivial stakes. Per the report, prediction markets appear to be one of the best blockchain use cases, since they necessitate trustlessness and decentralization to work correctly, protecting themselves from both governmental actions and censorship.

However, according to Binance, Augur presents other substantial flaws, including low liquidity, barebones functionality, complex mechanics, an unclear approach to governance and the aforementioned ongoing attack. Prediction market regulation is particularly unclear, as a centralized prediction market can fall under the scrutiny of the regulators of multiple states. For instance, Ireland-based prediction Markets Intrade and TEN have seen the United States Commodity Futures Trading Commission (CFTC) file a civil complaint over their violation of the off-exchange options trading ban.

Article Produced By
Adrian Zmudzinski

Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.

https://cointelegraph.com/news/research-ethereum-based-prediction-market-augur-currently-faces-a-design-flaw-attack

David https://markethive.com/david-ogden