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Blog

ICO Activity Through June 5th 2018

JL Law

Initial coin offerings have grown in popularity over the last few years. The sheer volume of funds raised by these coin offerings has shot up in astronomical amounts. To illustrate this point one only need to look at the ICO numbers provided by Icodata.io. Their website is minimal and easy to navigate. Their numbers are presented in easy-to-read graphs. According to their figures, the total amount of cash raised by ICO's just in the first five days of June, is nearly as much as was raised in the years 2014-2016. Let that sink in. $69,213,141 has been raised through ICOs in the 120 hours that existed between June 1 and June 5 of 2018.

Do you know the total amount of funds raised by ICO in 2014? It was only $16,032,082. The total amount raised by ICO in 2015 was only $6,084,000. In 2016 the funds raised through ICO began to climb, but ultimately, only $90,250,273 was raised. The numbers are climbing through these years, and it is apparent that ICO's are becoming more popular. There were only 2 ICOs in 2014. In 2016, there were 29 ICOs, and by the end of 2017, there would be 871 ICOs in that year alone raising a staggering $6,101,438,558. This represents a dramatic uptick in the amount of ICOs and the amount raised through them. 

The interesting thing about the data from 2017 is that the first half of the year was rather quiet. There was not much activity in terms of ICOs. However, through the last six months, particularly the last four months of 2017, the amount of ICO activity spiked dramatically. Ultimately, all previous ICO numbers would be shattered in 2017. The $90 million raised in 2016 looks really small when compared to the over $6 billion mark of 2017. ICOs are now a very big business indeed. That trend has not stopped in 2018. If anything, the booming trend of ICOs has only continued to skyrocket into the present day. 

As we've seen five days into June, ICOs have already raised nearly $70 million dollars. Currently, ICOs have raised a staggering $5,168,439,957 dollars this year, and we are not even halfway done with the year yet. Interestingly, if you look at the graphs for 2018 and 2017 side by side, there is a large spike in funds raised December through March. Each one of those months broke one billion dollars raised. Leading up to December of 2017 ICO numbers are trending up, but since January 2018, ICO numbers have been trending downwards. To be fair, ICOs raised over a billion dollars in February and in March, but they have yet to break a billion dollars in a single month since then. 

Perhaps most interesting, however, is that not all ICO data sites agree on exact figures, but they are pretty close. For example, ICObench shows slightly different figures for the last year. They show the current earnings for this month at over 83 million versus Icodata's figure of just over 69 million. There are other slight figure discrepancies between the two sources. ICObench does not present their data in a format that is as easy to read as Icodata does. Determining a source's quality and trustworthiness falls upon the reader. To be fair, both sources present data that is ballpark to one another. However, Icodata has been cited by major publications such as Forbes and the New York Times. These publications hold themselves and their sources to a high-standard of journalistic integrity. Regardless, the overarching trends for ICOs remain the same.

So how are most of these ICOs doing in in compliance with US securities laws?  The dominant exception used is Rule 506(c), which requires accredited investor verification.