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ICOs increasingly targeted by cyber-thieves

Atheer – External Sources

A significant amount of funds raised through ICOs are being either lost or stolen by criminals, experts have warned.

According to IT Pro Portal, an analysis of 372 Initial Coin Offerings (ICOs) that had raised a total of $3.7 billion, found that approximately $400 million of this amount had been lost. The most common way in which funds were being taken was found to be through phishing attacks, with malicious actors getting their hands on $1.5 million in ICO proceeds per month.

The newer ICOs are having more trouble reaching their targets and global innovation leader for blockchain technology at Ernst & Young, Paul Brody, believes that the quality of these projects is what’s behind the failure.

“The volume just exploded, people raised their fundraising goals and the quality just dropped. We were shocked by the quality of some of the white papers, we see clear coding errors and we see conflicts of interest between the companies issuing tokens and the community of token holders,” he said.

The value of the tokens that are issued during ICOs are sometimes driven by FOMO, or Fear of Missing Out and often are not linked to project development.

Some also see ICOs as a platform for carrying out scamming attacks, which is why South Korea and China have already banned the practice. In the United States for example there have been multiple accusations of fraud.

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