Ransomware may have been the topic in town. But something that is more closely related to personal wealth growth is of long-term interest to pubic. That’s ICO(initial coin offering), topics around which are getting heat up. However, experts believe that ICO are not fit amateur investor for their lack of expertise to assess the projects.

ICOs are growing wild

A blockchain startup in China called Inchain has completed 20 million CNY funding in 22 hours. Gnosis took 9 minutes to sell out all tokens! Blockchain Capital received 10m USD in 6 hours! ICO is getting more attention but regulation is in heavy backlog. Therefore common Chinese investors are advised not to get involved, said by Deng Di, Director of China Blockchain Research Center, said. Deng Di is also known as the master behind a Chinese exchange named Yuanbao.

As per a report by Yicai , many professional blockchain VCs or bitcoin investors believe that the traditional investors are not fit for the unregulated ICO market.

ICO fudning Vs Traditional VC

Compared to traditional VCs, ICO is a better option for innovators and startups. Gong Ming, an opinion leader in China blockchain said:

“ICO has many advantages, the project shall face investors directly in the initial stage, which could greatly reduce the barrier between both parties. Secondly, the open-source programs allows more people to participate in the development. Moreover, the digital currency can be traded every minute, which will investors to get access to good liquidity. The most important thing is that, based on the characteristics of digital currency, ICO can collect funds from global investors.”

The usual practice of ICO is to distribute over 50% of the tokens and prove that they are not being controlled by the founding team. If funding target is not reached, the unfunded tokens could be sent to some blackhole address for “protecting investors interest”.

But the funding method also bears some defects.

“ICO projects are highly risky. Common investors are not in position to access them. There is no mechanism to ensure the delivery of promise by the project team. Therefore ICO is currently not suitable for non-professionals to participate in.”

Deng Di, Director of China Blockchain Research Center, said.

Cooperation instead of opposition

So far there is no formal regulation on bitcoin in China, let alone on ICO. PBOC has completed administrative penalties to the “Big Three” bitcoin exchanges in China. The announcement plus two guidelines is expected to be released in June.

Deng Di said,