ICO Fundraising Rebounds in May Despite Regulatory Uncertainty

Demand for initial coin offerings (ICOs) strengthened last month, as several major projects eclipsed the $1 million funding mark. Though the total fundraising amount remains well below peak levels, May represented the first monthly gain since December.

ICO Funding Jumps in May

Token projects raised more than $795 million for May, an increase of 42% from the previous month, according to ICOData.io. Funding had declined steadily each month since December, when the total funding amount hit a record high of $1.66 billion.

The total funding amount for April was just $561 million, the lowest since August.

Despite the slowdown, ICOs this year have already raised about 84% of the yearly total for 2017. Since January, more than $5.1 billion has flowed into initial coin offerings across 828 projects.

Some of the biggest projects to conclude in May include Orbs (118 million), VideoCoin ($50 million), DDC ($49 million), Sentinel Protocol ($27.7 million) and PChain ($26.67 million). XYO Network, a company that was reviewed by Hacked, generated $12 million in funding. The Abyss also cracked the $1 million mark.

Some of the largest projects include Dragon Coin ($320 million), Hdac ($258 million and Filecoin ($257 million). Nearly a dozen projects have raised $100 million or more.

The author counts 48 million-dollar projects that concluded in May, based on figures provided by ICOData.

ICO Market Outlook

ICOs remain poised for a stellar year despite the general market downturn for cryptocurrencies. Though influenced by overall market sentiment, token projects are said to have a buffer due to their longer time frames.

So while ICOs can withstand a general market downtrend, they are more likely to face disruption from regulatory forces – or from a fear of government intervention. Last year, the U.S. Securities and Exchange Commission (SEC) warned that some tokens are securities; this year, the regulator has been much more pointed in stating that all tokens should be classified as such.  Most tokens claim to be for application – i.e., a utility token – but the SEC is not buying that argument.

ICO regulation has been, at best, a patchwork in progress as agencies struggle to identify a common framework to govern the market. For what it’s worth, the SEC is planning to hold a session on digital assets June 13 in Atlanta as part of a much larger investor conference.

Although Congress and the Commodities Futures Trading Commission (CFTC) have commented on ICOs, the roadmap for regulation will probably come from the SEC. The agency will be tasked with clarifying ICO rules inside the United States, which will provide the rest of the world with direction.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi