Ex-BitMEX CEO Arthur Hayes has made headlines with his sharp criticism of EOS, labeling it the most value-destructive initial coin offering (ICO) of 2017. In his latest blog entry titled “The Cure,” Hayes highlights the significant pitfalls and failures of EOS following its substantial fundraising.
Initially celebrated as a game-changer in blockchain financing, the EOS ICO raised an astounding $4.1 billion from June 2017 to June 2018, setting records in the cryptocurrency world. However, despite this impressive figure, Hayes argues that the project’s development stalled post-launch, leading to disillusionment in the crypto community. He notes, “Block.one raised $4.1 billion in crypto to build EOS. EOS launched and was never to be heard from again,” emphasizing the stark reality that the ambitious goals set by the EOS team never materialized.
Even amidst the turmoil, EOS has managed to cling onto a market cap of $1.2 billion, showcasing the erratic nature of cryptocurrency investments. Hayes warns investors about the dangers of overvalued tokens and high *fully diluted valuations*, cautioning against investing in ICOs without tangible follow-through. “To shoot for the 10,000x, you must accept that most of your investments will trade near zero post-ICO,” he stated, drawing attention to the inherent risks associated with ICO investments.
Looking back at the ICO landscape in 2017, it is evident that many projects, like EOS, brought forth enormous capital but faded into obscurity without delivering on their promises. In 2019, the Securities and Exchange Commission (SEC) charged Block.one, the company behind EOS, for conducting an unregistered securities offering, leading to a $24 million settlement while denying any wrongdoing. Today, EOS trades at approximately $1.15, representing a staggering 95% decline from its peak of $22.89 in April 2018.
As the cryptocurrency market continues to evolve, Hayes advocates for a rejuvenation of ICOs that prioritize investor welfare. He calls for a concentrated effort to identify and support promising projects that can deliver genuine value and returns to retail investors. This sentiment resonates strongly as many are left grappling with losses incurred during the speculative frenzy that characterized the initial coin offerings of 2017.
- Arthur Hayes discusses the downfall of EOS.
- EOS raised $4.1 billion but failed to deliver on its promises.
- Significant risks associated with ICO investments are highlighted.
- Call for responsible ICO funding practices.
