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Huge ICO plummets, raising transparency questions

A screen of an ATM cash-to-bitcoin machine flashes an image of the virtual coins. Photo: Peter Dejong / AP

Tezos, which raised $232 million in an initial coin offering in June, plummeted on derivative exchanges before the product — a blockchain for digital currency — even launched, Bloomberg reports. Derivatives on Tezos tokens fell as much as 31%, according to exchange HitBTC, Bloomberg says. Ethereum, a platform used to launch many ICOs, fell 2% after the news, per Coindesk.

Why it matters: As Bloomberg puts it, "Experts have warned for months about the risks and lack of transparency in ICOs, which have raked in $3 billion this year despite offering little protection or guarantees to investors. Whether Tezos recovers to deliver value to investors could go a long way to shaping how authorities regulate ICOs."

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