ICOs have raised USD 3.2 billion so far, according to Coin Schedule. 2017 isn’t over yet and the pipeline is full so that tally will rise by year-end. Meanwhile if you ask most Americans, they would not be able to describe an upcoming ICO. A recent LendEDU survey of 1,000 Americans revealed that 75% of people don’t know what an initial coin offering is. While bitcoin rings a bell for most people, digital coins other than the top cryptocurrency, also known as alt coins, are foreign to most as is the Ethereum network on which most ICOs are launched.
Of those Americans who have heard of upcoming ICOs, the details are foggy. For instance, about one-fifth of those surveyed believe that ICOs are illegal, while less than 20% know they are permitted. The balance of those polled weren’t certain about the regulatory status of token sales. Ethereum, which is the No. 2 cryptocurrency, is known by 50% or more of millennials but the numbers for older generations dwindle from there.
Now that mainstream investors are able to gain exposure to early stage startups as a result of upcoming ICOs, most of them aren’t taking advantage of it. Just 15% of those polled said they’d invest in a startup via an upcoming ICO, while more than thalf said they wouldn’t. Less than one-third said they weren’t sold but did not rule it out.
ICOs and the SEC
Meanwhile, even as bitcoin and upcoming ICOs push further into society, the rules surrounding cryptocurrencies are largely still being written. The US SEC in recent days charged a Philadelphia trader with a fraud tied to the brokerage accounts of dozens of investors. Joseph P. Willner allegedly collected USD 70,000 in illicit profits and tried to cover up his tracks by converting US dollars into bitcoin, according to the SEC.
The lastest scam is precisely the type of risk that the SEC is trying to protect investors from. If you ask policymakers, they might prefer to keep upcoming ICOs out of the hands of Main Street. As long as ICOs aren’t banned, they may not have a choice. Major global exchanges including the CME Group are close to launching bitcoin futures, which may suggest that alt coins and upcoming ICO trading products are next.
For information on how to buy and trade bitcoin, see our complete guide here.