Wall Street Journal: Hundreds of ICOs are scams

A recent study published in the Wall Street Journal on December 27 found that hundreds of cryptocurrency projects show signs of fraudulent activity and plagiarism.

During the investigation, WSJ staff downloaded the white papers of 3,291 cryptocurrency projects that announced an ICO on their websites. After this, they analyzed the documents, immediately eliminating duplicates and non-English versions. 

To identify duplicates, the researchers compared sentences with at least ten unique words with each sentence from a different white paper. Next, they read and analyzed about 10,000 sentences that appeared repeatedly among 3,291 documents. The researchers then compared the stated dates of the ICO to see which document containing the proposal was published first, and excluded it from their database.

According to the staff, about 16% - 513 white papers showed clear signs of plagiarism, implausible promises, and identity theft. 

White papers of more than 2000 projects contained enticing phrases like “no losses,” “guaranteed profits,” “high profits,” “without the slightest risk.” 

U.S. state and federal regulators are paying close attention to ICOs whose representatives have spoken in similar language, issuing orders prohibiting the continuation of illegal activities or suing alleged criminals.

In August, the Wall Street Journal published an article according to which manipulation of the prices of cryptocurrencies is mainly carried out by “organized trading groups” that use services like Telegram. WSJ journalists suggest that coordinated pump-and-dump schemes are responsible for the collapse in the value of digital assets this year. 

According to cointelegraph.com