Justin Bones, Founder and CEO of Cyber Capital Europe, has criticized the current financial model of the cryptocurrency market, stating that it is dominated by venture capitalists (VCs). Bones believes that regulatory measures have effectively made Initial Coin Offerings (ICOs) illegal, concentrating early investment opportunities in the hands of VCs and excluding retail investors.
He describes this situation as the “Boy’s VC Club,” where strict regulatory requirements such as Know Your Customer (KYC) and Anti-Money Laundering (AML) processes create barriers for small investors.
“We need to bring ICOs back! Cryptocurrency fundraising used to be democratized; anyone could participate equally. Now, the market is dominated by predatory VCs! The culprit: regulatory bodies declaring ICOs illegal, handing the entire early market to venture capitalists,” tweeted Justin Bones on June 27, 2024.
He points out that these regulations require higher minimum investment amounts and legal services that most retail investors cannot afford. This has transformed the cryptocurrency market from a democratized investment field to an area where VCs provide early access at preferential prices and sell at high prices to retail investors.
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Bones argues that ICOs should be made accessible to a wider audience again to ensure a fair competitive environment for investments.
Despite these criticisms, the latest data from CryptoRank shows a slight recovery in cryptocurrency funding, with an average monthly raise of $20.21 billion since January 2024. However, this is still below the levels seen during the boom of risk funds in 2022.
Bones also advocates for a return to a more open and transparent investment model, focusing on equal access rather than providing preferential opportunities for VCs. He believes that it is crucial for a healthy market to have retail investors involved in the early stages of cryptocurrency investments.
