- Coinschedule, an ICO ratings site popular during the 2017/18 ICO boom, has settled with the SEC over non-declaration of paid promotions
- ICOs would pay Coinschedule for favorable reviews which were presented on the site as independent
- Coinschedule were fined $197,000 as a result of the SEC’s action
Coinschedule, an ICO ratings website, has settled with the Securities and Exchange Commission (SEC) over payments made to it by ICOs looking for favorable reviews. The SEC confirmed in a statement yesterday that Coinschedule reviews were not independent but were instead “bought and paid for by token issuers” between 2016 and 2019, fining the now defunct site $43,000 in disgorgement plus a penalty of $154,434. The settlement is another example of the illegitimacy of much of the ICO craze during the 2017/18 bull run, where pump and dumps proliferated, benefiting early token holders and project creators.
ICO Rating Sites Were Always Questionable
For those around during the 2017/18 ICO boom, ICO ratings sites were always somewhat untrustworthy. Projects that looked like outright scams received perfect scores while genuine projects with bright futures got an underwhelming response. The reason for this has become clear in the years since the ICO bubble burst – they were being paid.
One such site, ICORating, settled with the Securities and Exchange Commission in 2019 over paid reviews, and this week it was the turn of Coinschedule. Coinschedule, the SEC summarized, offered a “trust score” along with their reviews based on several factors, when in fact the projects in question were paying Coinschedule for such profiles, payments that Coinschedule didn’t declare.
Coinschedule Fine Highlights Corruption
Coinschedule was operated by United Kingdom-based Blotics Ltd, which paid the penalty without admitting or denying the charges against it, which is often cheaper than going to court. The news that another ICO rating site was taking payments in return for positive reviews is another example of just how corrupt the ICO craze of 2017/18 was, with the format ending up being a quickfire cash grab once the token listed on an exchange.