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# Implosion of the ICO Bubble

Probably it is safe to say that unregulated financial spaces will always create issues. There will always be bad actors looking to exploit the system. That is why both IPO (Initial Public Offering) and private equity or Venture Capital became so over-regulated.

In fact, now they are so complicated that it became increasingly difficult for retail investors to participate in the market.

The ICO (Initial Coin Offering) was heralded as the democratization of the investment space. Now, everyone could participate and get rich by supporting this new and emerging technology.

But, as is usually the case, this led to a few bad actors exploiting the space by means of ICO exit scams. As a result, these few scandals and scams gave the entire ICO industry a bad rep.

This included the Puyin Blockchain Group, *a tea-based blockchain project defrauding over 48 Million USD or Pincoin, which pulled off a 660 Million USD scam.

# Facebook and Google Banning ICO Ads

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As a result, first Facebook and then Google banned advertising of ICOs and tokens in Q1 of 2018.

Outside of these extreme cases, the market in general has seen investors turning away from ICOs quoting, *low crypto prices* and the fact that only a handful of those startups managed to bring sustainable value to the table.

It is said, that sometime in 2019, many ICO companies will run out of capital accumulated in 2017 and if they fail to come up with sustainable business model, they will be off the market by the end of 2019.

As a result, many crypto sceptics were quick to point out that blockchain startups, despite having accumulated over $30 billion in ICO money, have failed to deliver a meaningful user base.

One victim of the diminishing interest in ICOs was Ethereum: the primary platform for many ICOs. According to the analysts, its rapid price decrease was caused by lower usage rate, due to fewer ICOs being held.

Additionally, the fact that many projects are selling off their Ether to maintain liquidity, contributed to the increased supply and lower prices.

When in November 2018, the SEC went hard after two ICO companies: Airfox and Paragon Coin, this sent a message to the entire sector, that the wild wild west of token sales is over.

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