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The ICO craze is making cybercriminals rich, too

January 22, 2018

Besides entrepreneurs and investors, hackers are also cashing in on initial coin offerings.

The news: Professional services firm Ernst & Young examined 372 ICOs and found that roughly $400 million of $3.7 billion raised so far has fallen into the hands of cybercriminals. (See “What the Hell Is an Initial Coin Offering?”)

The significance: The finding likely adds fuel to the already-intensifying scrutiny of ICOs by regulators and lawmakers. China and South Korea have banned the practice, and more countries could follow suit. In the US, the Securities and Exchange Commission has warned investors to watch out for scams, and it recently halted two ICOs for violating laws meant to protect investors.

The show continues: As regulators wrestle with the novel fund-raising approach, the ICO bonanza shows no signs of stopping. Encrypted messaging service Telegram recently announced that it intends to raise $2 billion in an upcoming offering.

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