The increase in the price of bitcoin and ether wasn’t the only major headline in the cryptocurrency space in 2017. Initial Coin Offerings (ICOs) also became a major part of the scene. These ICO campaigns collectively raised more than $5.6 billion in 2017, and already, more than $3 billion has been allocated to projects in 2018, according to ICODATA, an online ICO monitoring platform.
ICOs have also attracted fraudulent elements looking to take advantage of the unregulated nature of the market via pump and dump schemes. This development has naturally led to an increase in the level of regulatory oversight by many countries in a bid to sanitize the market.
Proceeding with Caution
While blockchain-based startups have dominated the ICO market, stakeholders in the mainstream finance sector have begun to take an active interest in the market. The “Big Four” consulting firms of Deloitte, KPMG, PwC, and EY have been making significant inroads into the market in an attempt to provide distinguished consultancy services for startups and ICO investors.
In a January 2018 article on Consultancy.uk, it was reported that these above-mentioned rivals were beginning to take the market a little bit more seriously than in previous years.
Despite the concrete interest in the market being exhibited by the Big Four, they are proceeding with caution. This particular market is risky, fraught with malpractice and the unregulated nature of it makes it a nightmare for mainstream companies. These consultancy firms thus have to attempt to balance their service provision activities alongside trying to navigate the turbulent crypto market. On top of this, these firms must avoid any vicarious liability arising from fraudulent campaigns.
The decision of these large corporations to err on the side of caution with respect to ICOs stands in sharp contrast to their attitude towards blockchain technology. Since 2012, they have been pursuing various implementations that could potentially improve their service delivery mechanisms.
This hesitancy is a trend that seems to be consistent within the corporate world as more attention is being paid to blockchain innovations rather than the cryptocurrency market.
Notable Strides Made So Far
Deloitte played a major role in the Playkey ICO that raised $10.5 million during its November 2017 ICO. For six months prior to the crowdsale, Deloitte provided legal advice to the Egor Gurev led Playkey development team.
According to Grianne McNamara, the blockchain leader at PwC, much of the firm’s ICO work has been restricted to Europe and Asia. The firm is yet to take on any ICO client based Stateside. Instead, PwC has been hard at work trying to assess the U.S. ICO market with the aim of creating a robust advisory framework for any potential U.S.-based client in the future.
EY has been monitoring the U.S. and international ICO markets. This is according to Jeffrey Grabow, the U.S. venture capital chief at the firm. EY has been focusing most of its attention on providing advisory services on the various risks associated with the ICO process. KPMG, on the other hand, has been active in the ICO market since mid-2017.
Apart from the ICO market, the Big Four rivals have also adopted bitcoin at varying levels. BTCManager published an article on the subject in December 2017.