Launched in August 2017, ConcourseQ has conducted strict due diligence for hundreds of Initial Coin Offerings (ICOs). Now, it is offering cryptocurrency enthusiasts an opportunity to safeguard the rest of the community from dubious ICOs by surveying Qfellow reports.
ConcourseQ and Qfellow
ConcourseQ first started its Qfellowship program in 2017. The program was open to all members of the cryptocurrency and blockchain community and candidates were selected after a detailed process. The platform was established with the sole purpose of providing investors with a sound analysis of upcoming ICOs.
Since inception, the platform has warned investors by flagging 171 ICOs, publishing 15 editions of “Terrible Token Tuesdays,” and has even shut down two fraud Icons – Moirai and Cvent. Applicants admitted to the Qfellowship program are paid $350 worth of Ethereum each month. Notably, a significant percentage of the members are experienced in the blockchain sector.
The Deceitful World of ICOs
The rapid rise in valuation of bitcoin and other cryptocurrencies in 2017 resulted in several companies launching their ICOs. Initially meant to be the cryptocurrency equivalent of an Initial Public Offering (IPO), several ICO firms lacked concrete business plans and, in some extreme cases, a working team.
After a series of exit-scams and fraudulent ICOs coming to light, regulators across the globe stepped in, ranging from the Japanese Financial Services Agency (FSA), Canadian Securities Administrators (CSA) and United States Securities and Exchange Commission (SEC).
The authorities warned investors on the perils of ICO investing and appealed for conducting thorough due diligence research on such emerging projects or be prepare to lose their investment. Furthermore, authorities noted the price of cryptocurrencies and tokens are inherently volatile and do not have price limits levied in the traditional sectors.
ICOs vs. IPOs – The Great Contrast
ICOs are widely regarded as the easiest fundraising procedure. While issuing a token is reasonably straightforward, conventional IPO are tedious and involve tremendous legal formalities and paperwork, such as the 400-page long Red Herring Prospectus. Additionally, a company takes between six months to a year to fully-compliant.
In stark contrast, ICO firms companies outline their plans in a white paper, give the number of tokens they will release and quote a price of the token in a cryptocurrency.
In case an IPO is undersubscribed, the shares cannot be burnt. However, if an ICO fails to reach its cap, firms commerce with “burning” their tokens and drastically limiting their circulating supply. However, compared to the centuries-old stock market, the ICO industry is still nascent, and the few bad players are minuscule in number to the teams working on genuine products.