DropDeck, Waves and Co .: Initiatives are trying to tackle ICO fraud

DropDeck, Waves and Co .: Initiatives are trying to tackle ICO fraud

In the European Union, the next big step will be taken in April 2018. As part of an amendment to the money laundering and terrorist financing legislation, experts are expecting some regulatory measures for the new and even controversial form of financing the ICOs (Initial Coin Offerings). Because the form of investment is booming in spite of the legal gray areas (trending topics reported) like hardly any other segment. Blockchain startups alone raised more than $ 3.7 billion in ICOs in 2017, according to CoinDesk. The greatest successes: The ICO of Tezos fetched 232 million dollars, Filecoin took 257 million dollars.

“It seemed as if almost anyone with a white paper, a landing page, and some bells and whistles could collect tens of millions of dollars for his seemingly innovative blockchain projects. A simple, this and that on the Blockchain ‘was usually sufficient, “says Michael Kirchmair, ICO specialist at startup300.

DropDeck, Waves and Co .: Initiatives are trying to tackle ICO fraud
DropDeck, Waves and Co .: Initiatives are trying to tackle ICO fraud

Currently there are 1324 listed cryptocurrencies ( on the file sharing networks. But according to, there are 17,518 ERC20 tokens that have a Smart Contract listed on Ethereum. The Ethereum Blockchain thus makes more transactions than all other cryptocurrencies combined. “Just by the sheer amount of ERC20 tokens you can already guess that these are not just disruptive business ideas,” Kirchmair continued. There are tons of scams among the ICOs.

The case “Coinfido”

In the future, therefore, investor protection will be the main focus of private and public initiatives. For more and more often the news about the robber barons of some companies haunt the Internet. A few days ago, the case of Coinfido became known. Shortly after the ICO, which flushed $ 375,000 in the form of ether into the coffers of the company, disappeared the founders without a trace. The website, social mediaaccounts, mediaarticles (except for one) and all other links on the Internet of the alleged smart contract provider for payment solutions have been deleted.

Of course, the deposits disappeared with the founders. The TokenLot platform, which managed the ICO, will now turn on the FBI to locate the Coinfido team led by Joost van Doorn.

Taking advantage of credulous investors through an ICO is child’s play. Businesses need nothing more than a meaningful homepage, a (often slightly adapted) whitepaper, a few clever heads in the team section, and artificially bribed accounts on Reddit and Bitcointalk to foster false expectations and collect as many ethers as possible.

State framework possible

“Exit scams” such as those of Coinfido, ether phishing through congruently copied websites, and the proliferation of bounty programs that encourage investors to spread positive content about the company on social media are the main causes of the ICOs in one Bad light move. Some states are trying to establish legal bases for corporate financing.

Abu Dhabi, for example, ventured a first push and categorized the ICOs close to the at least particularly related IPOs. ICOs are treated as securities. Issuing companies are subject to a prospectus obligation and must notify the ICO to the authorities. The Ministry of Finance also issued a firm warning to investors, recommending that it only be used with the utmost caution in this market segment.

Blockchain initiatives: Waves, DropDeck, Coinvest300

There are also initiatives within the community that are committed to improving the quality of ICOs and protecting investors from fraud. The longest on the market is the platform Waves. An active international community will review and evaluate the white papers and business cases of future ICOs. The reviews are also based on direct communication with the founders on and are included in the ranking of the ICOs on ICObench.

ICObench offers an overview of the upcoming Inital Coin Offerings. However, often remains in the shade, as the reviews come about exactly.

DropDeck: IBM Watson helps with screening

DropDeck offers an additional approach. By means of artificial intelligence, another aspect is created in addition to the community, which evaluates the performance of the blockchain startups. DropDeck works with the A.I. XPRIZE from IBM Watson, and is the first blockchain startup to use artificial intelligence to improve screening and ranking of ICOs. By using its own cryptocurrency, supporters of the initiative are additionally motivated to become active in fact-finding, due diligence and evaluation of startups. The community puts the ICO through its paces.

Dropdeck itself is currently launching the crowd sale of its own tokens (white paper and whitelist). The goal is a one-stop shop for financing. The pre-sale brought in over 5,000 ethers.

Coinvest300 launches workshop

Also in Austria – more precisely in Linz – is currently forming a union that wants to help ICOs from their infancy. The initiative coinvest300 (Trending Topics reported) under the leadership of startup300, Catalysts, Brandl & Talos Attorneys at Law, KPMG, Conda and The Minted wants to provide the necessary tools to potential ICO candidates with legal, tax and technical support. Here too, a one-stop shop is to be created.

The coinvest300 partners want to make sure that startups planning an ICO are well equipped at all levels. For this purpose, a first workshop will be held in December with all partners, where startups can present their ICO. The workshop then critically examines the project and identifies opportunities and risks of the planned ICO. Registrations are now possible.


Peace Love and Harimbadl

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