[Ko ran] Do ICOs democratize crypto investments? (Part one)
[Ko ran] Between 2017 and 2018 was the time of ICOs. With the immense popularity of cryptocurrency at the time, millions of won were invested in it without people even asking what the company does. While a small group of people made money out of the offerings, the majority of investors faced major losses. There are several types of losses. #Initial Coin Offerings (ICO) turning into losses 1. While people were waiting for an initial coin offering, bubbles formed before the market completely died out, showing the true nature of the cryptocurrency. People started wondering why they spent so much on the coins. The price of the coins exchanged in the market reached the level of tragedy. The investors, regardless, can blame nobody since they paid for it with their own will. 2. Following the ICO, the coin price jumps several times, leading investors to delude themselves into thinking the coins have bright future. With the firm belief that the coin price will rise further, they wait. Ultimately, the coin price plummets. This was the case for me. After the ICO, the price sharply rose. I [Ko Ran, a reporter at Join:D], thought the price would rise further, but after waiting, it eventually plummeted. I now don’t even remember the login id for the exchange, but I don’t feel sorry about it because I can’t even buy gum with that money. 3. Even after gathering investors, they don’t get to see the value of the ICO. Sometimes, the delay is due to the need to build a proper token economy. But investors feel betrayed when they start to doubt whether the project is actually taking place or not. Some companies just pretend to be working on ICO. #Did the investors get their money back? Telegram did not fall into any of the three cases mentioned above. The United States Securities and Exchange Commission (SEC) obtained a temporary restraining order against Telegram and TON (Telegram Open Network) blockchain. Late last month, Telegram offered two options for investors. One was to instantly return 72 percent of the investment due to the delay of the TON launch, while the other was to provide 110 percent of the investment within the first year of the TON release. Telegram, however, separately noted that U.S.-based investors can’t take the second option. The role of the SEC is to protect investors. TON, which didn’t go through an IPO, is now illegal and still will be a year later. Due to the SEC measure, Telegram dropped TON project. Currently, there isn’t any specific information on investment returns. But according to foreign media, many investors are likely to file a lawsuit against Telegram and its founder Pavel Valerievich Durov. Some are even demanding a return of shares in Telegram, instead of in cash. Considering the past SEC orders, it appears it will be difficult for investors to get their money back. To be continued, in part two.