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The company analysed around 380 ICOs and discovered that about $ 400 mln of the attracted $ 3.7 bln were stolen.
The most widely used hacking technique for ICO was phishing. Hackers steal nearly $ 1.5 million in proceeds from ICO per month, the report says.
The study also showed that ICO's popularity has been declining since the end of 2017. Fewer than 25% of ICOs achieved their goal in November, while the number reached 90% in June.
The problems in achieving goals, faced by the recent offerings, can partly be explained by the poorer quality of the ICOs and problems that have arisen around previous projects, explained Paul Brody, Ernst & Young's head of innovations in blockchain technology.
During the ICO, companies usually raise funds to create new platforms, or to finance a business using crypto-currency and blockchain technology. Nevertheless, some of these projects often find the need for blockchain and crypto-currencies unreasonable, EY says.
The company also noted that estimating the value of tokens during the ICO is often due to fear of losing benefits and has no bearing on market indicators development of projects.
The research also revealed several cases where the basic program code of the project had hidden conditions for investment that were not disclosed or conflicted with previously disclosed information. For example, information can be provided that there would be no further release of tokens, but the code may leave room for this.
In November, the co-founder of Ethereum Joseph Lubin and Ripple CEO Brad Garlinghouse warned of an increase in the number of fake projects that offer almost no value to investors.
Many ICOs are used to support "good projects, but there has been a number of copycat offerings where people steal materials, not intending to provide any value to people buying tokens," Joseph Lubin told CNBC at a finteh festival in Singapore.
Brad Garlinghouse also warned of the risks of ICO. "I think that much of what is happening in the ICO market is actually fraud," he told CNBC, adding that many investors are suing issuers of tokens.
source: cnbc.com
The most widely used hacking technique for ICO was phishing. Hackers steal nearly $ 1.5 million in proceeds from ICO per month, the report says.
The study also showed that ICO's popularity has been declining since the end of 2017. Fewer than 25% of ICOs achieved their goal in November, while the number reached 90% in June.
The problems in achieving goals, faced by the recent offerings, can partly be explained by the poorer quality of the ICOs and problems that have arisen around previous projects, explained Paul Brody, Ernst & Young's head of innovations in blockchain technology.
During the ICO, companies usually raise funds to create new platforms, or to finance a business using crypto-currency and blockchain technology. Nevertheless, some of these projects often find the need for blockchain and crypto-currencies unreasonable, EY says.
The company also noted that estimating the value of tokens during the ICO is often due to fear of losing benefits and has no bearing on market indicators development of projects.
The research also revealed several cases where the basic program code of the project had hidden conditions for investment that were not disclosed or conflicted with previously disclosed information. For example, information can be provided that there would be no further release of tokens, but the code may leave room for this.
In November, the co-founder of Ethereum Joseph Lubin and Ripple CEO Brad Garlinghouse warned of an increase in the number of fake projects that offer almost no value to investors.
Many ICOs are used to support "good projects, but there has been a number of copycat offerings where people steal materials, not intending to provide any value to people buying tokens," Joseph Lubin told CNBC at a finteh festival in Singapore.
Brad Garlinghouse also warned of the risks of ICO. "I think that much of what is happening in the ICO market is actually fraud," he told CNBC, adding that many investors are suing issuers of tokens.
source: cnbc.com
