According to bitcoin analyst and researcher Tuur Demeester, the former CEO of Morgan Stanley — the $89 billion U.S.-based bank — is seeking to raise over US$950 million in an initial coin offering (ICO), merely a few days after prominent boxer Floyd Mayweather raised over US$30 million in an ICO he sponsored.
ICO Second Wind?
John Mack, the former CEO of Morgan Stanley, stated:
“I have been watching and investing in the cryptocurrency market over the last several years… We think Omega One is going to be transformative because it benefits the entire ecosystem – making crypto assets cheaper and easier to access.”
However, similar to the vast majority of ICO projects within the bubble-like ICO market, this project has yet to produce viable products and software. Still, Mack has endorsed Omega One’s ICO despite the fact that it does not even have a functioning prototype or codebase to show.
Alex Gordon-Brander of Omega One described the project platform as a “bridge between traditional capital markets and the crypto markets” which will provide “balance sheet intermediation and a trusted counterparty.” In essence, Omega One will operate as an efficient and trusted platform for institutional and large-scale investors seeking to invest in the cryptocurrency market. It uses a non-custodial smart contract wallet system and aggregation of liquidity across many cryptocurrency exchanges to ease the buying process for institutional investors.
The vision and platform of Omega One are interesting and unique. Such a liquidation and investment platform for institutional investors still does not exist within the cryptocurrency market. However, some of the most successful ICOs in the market including Bancor and EOS received harsh criticisms from experts for raising hundreds of millions of dollars without having built or developed a functioning code base.
Bitcoin analyst Beutyon noted, “Bancor is 40 lines of code. The men who invested $144,000,000 in it, didn’t hire a developer to audit the software. Astonishingly stupid.” Augur co-founder Joey Krug stated, “Dear god, the free market just gave $150 million to something we found out didn’t work in practice in the Augur beta.”
It is too early in the development and testing phases of Bancor to evaluate the platform’s potential and functionality. The valuation of Bancor was flawed as the Bancor network is currently worth around US$84 million. That is $66 million less than the value of all Bancor tokens issued in its ICO.
It is important to consider what happened to Bancor in considering the lack of a viable product or codebase from Omega One, given the amount the new ICO plans to raise. According to a close and reliable source of Demeester, Mack is aiming to raise US$950 million in the ICO, nearly half of the investment raised by all ICOs in the past combined.
Conceptually, both Bancor and Omega One are viable and unique ideas that could work and attract millions of users into their platforms. The truth is, Bancor did not need to raise US$150 million in order to launch its platform by late 2018, and Omega One does not need nearly US$1 billion to build a code base and maintain its development team.
At the moment, the U.S. Securities and Exchange Commission (SEC) along with the Chinese central bank, South Korean government and Japanese financial regulators are planning to issue strict guidelines on ICOs and regulate the ICO market.