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Report: Substantial number of initial coin offerings appear to be fraudulent

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Report: Substantial number of initial coin offerings appear to be fraudulent

A significant portion of initial coin offerings seeking to attract investors appear to be fraudulent, according to a study conducted by The Wall Street Journal.

According to a survey of 1,450 digital coin offerings, 271 raised red flags for "plagiarized investor documents," "promises of guaranteed returns" and "missing or fake executive teams." Based on a review of company statements and online transaction records, investors put more than $1 billion into those 271 initial coin offerings.

According to lawsuits and regulatory actions, so far investors have claimed losses of up to $273 million in these projects, the report added.

Citing research and data firm Satis Group, such coin offerings have generated more than $9 billion in proceeds worldwide since 2017, according to The Wall Street Journal.