Charles Hoskinson, co-founder of ethereum, said, "Everyone says the ICO is good, but look at ethereum, it's like a time bomb."
ICO is a form of capital mobilization of startups related to blockchain technology. Accordingly, a company that wants to raise capital will issue a token code to
investors to collect virtual currency and mostly ethereum. In recent times, ICO operations have exploded, so much so that co-founders of ethereum say they need to cool down.
Charles Hoskinson, co-founder of ethereum, said, "Everyone says the ICO is good, but look at ethereum, it's like a time bomb."
Compared to last year, copper ethereum has increased by 1,700%. The dramatic rise in ethereum occurred at the same time as a trend towards new capital markets: the ICO. According to Autonomous Research, since the beginning of the year, companies have collected more than $ 1.2 billion from ICO offerings. It is worth mentioning that this figure is much higher than the volume of investment blockchain companies receive through ordinary investment and 6 times more than the total last year.
Hoskinson was one of the watchers who warned of the soaring momentum of the ethereum as well as the call for virtual currency. Last month, an ICO sale hit a record $ 35 million in just 30 seconds.
Hoskinson said startups attracting capital through the ICO mean that they have bypassed the necessary safeguards in traditional securities sales, such as the verification of investor funds. That could lead to future litigation, as the token buyer can sue the issuers because they do not grasp the risks of buying the property.
According to Hoskinson, the biggest risk of the ICO is legal issues. Historically, the US Securities and Exchange Commission (SEC) has maintained its outlook on the ICO. Many observers including Hoskinson and Brad Garlinghouse, the director of the blockchain-based money transfer company, predicted that the SEC would likely declare virtual currency as securities.
"The ICO is in a wilderness of financial markets, and if it behaves like a duck, the SEC would say it's a duck," Garlinghouse said.
In addition to the growing concern about ICO bubbles and legal risks, ethereum's recent downturn has come in so many ways, including overcrowding due to over-trading, group leader rumors Found dead ethereum or $ 7 million stolen incident on CoinDash.
But, like Ripple's Garlinghouse, Hoskinson says that despite the ICO bubble bursting, this is still a way for companies to attract capital, with a more regulated and limited environment.
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