Pantera Capital said “Its ICO Portfolio ‘Could’ See 25 Percent Refund Rates Over Non-Compliance”

Blockchain and cryptocurrency-focused investment company and hedge fund Pantera Capital has warned that 1 / 4 of its ICO ventures may be found to violate the United States’ securities laws.

According to the company’s most up-to-date newsletter cited by a Bloomberg article Dec. 13, the continued suppression by U.S. regulators means that several ICOs, that have already felt the pinch from declining markets, could must repay investors.

“While we believe the overwhelming majority of the ventures in our portfolio mustn't be affected, more or less 25 % of our fund’s capital is invested with in ventures with liquid tokens that sold-out to U.S. investors while not using regulation D or regulation S,” the publication quotes co-chief investment officers Dan Morehead and Joey Krug as saying.

“If any of those ventures are deemed to be securities, the U.S. Securities and Exchange Commission’s (SEC) position may adversely have an effect on them. of those ventures, about a third (approximately 10 % of the portfolio) are live and practical and, whereas they might technically continue without more development, ending development would hinder their progress.”

Included in the possible victims is cannabis-focused ICO project Paragon, one amongst 2 schemes the SEC ordered to repay millions of dollars in refunds and fines in November for breaching securities rules.

Data has since confirmed the downward pressure regulators have had on the ICO business, with the quantity of funding increased dropping considerably.

Barry Silbert, founding father of fellow investment giant Digital Currency group, told CNBC earlier this month he thought of the ICO market to be “dead.”

“You currently have the dearth of demand from ICOs and so you have got all the sponsors of the ICOs who raised a bunch of Bitcoin (BTC) and primarily Ether (ETH) who are currently commencing to sell that,” he explained.

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