The rapid growth of cryptocurrencies has led to an ICO industry with a turnover of up to $50 billion from 2017. This was done in the false assumption that no regulation was applicable for the crypto-world. The ICO-hype will now be followed by a massive litigation hype. The responsibility of the media and the many other “advisors and supporters” for the loss of investor money will thus also be dealt with.
The DotCom boom was nothing compared to the ICO-Hype
The extent of the ICO-Hype in the crypto scene is unprecedented in recent financial history. In contrast, the DotCom boom is comparatively modest (we know this from our own experience!). The DotCom boom of the so-called new economy took place within the regulatory framework and was limited to the then leading industrial nations. Back then private investors from Russia, China and South America, the Middle East and Africa participated in the boom only to a limited extent. These countries, on the other hand, participate massively in the ICO hype, both on the part of Token Issuers and investors. Dubai, for example, is something like the Delaware of the crypto-MLM scene next to Zug (Switzerland).
Multi-cultural scene beyond regulatory standards
Within a few months from spring 2017, a global, multi-cultural ICO scene developed at breathtaking speed, which celebrated and motivated itself at the countless blockchain events held. Tokens and smart contracts were celebrated as a disruptive phenomenon that would take place in a supposedly regulatory free space and therefore would not require any supervisory authorities. Regulation was yesterday, self-regulation is today and blockchain-based self-regulation will be tomorrow, so the credo lived in the scene. The regulatory authorities of the individual countries had and obviously have no clued, and in addition, there is also a lack of a global body to deal with the global phenomenon.
Obvious negative side effects such as a high use of cryptocurrencies on the dark markets have been judged by the scene as a necessity for further development. The ICO hype was fuelled by the massive rise in the valuation of the cryptocurrencies in the last few months of 2017, when countless “so-called” bitcoin, blockchain and ICO Advisors suddenly appeared on the social media, who allegedly had been dealing intensively with blockchain for years and are now prepared to offer their “valuable” consulting services to companies for excessive fees. Old-established self-employed insurance brokers discovered in autumn 2017 that it was much easier to sell crypto mining packages – of whatever kind – to men or women than to sell insurance policies, life insurance policies or loan contracts.
At the beginning of January 2018, the entire cryptocurrency market reached an unimaginable market capitalization of USD 750 billion. Between January 2017 and June 2018, some 1,500 new Tokens were sold via ICOs and some 20 billion USD collected from investors. These figures are estimates because transparency does not and did not exist in the ICO market. We, at FinTelegram, think that the number of unreported investor funds actually collected via ICO, Token Sales, and MLM systems is significantly higher and more likely beyond the 50 billion dollars.