Infamous penny-stockbroker Jordan Belfort, better known as the ‘Wolf of Wall Street,’ has reaffirmed his claim that initial coin offerings (ICOs) are “the biggest scam ever.” Earlier this year, he claimed that Bitcoin is a fraud.

ICOs have become popular to investors worldwide over the past year due to their high returns for early investors. Recently, signs have emerged that some ICOs might just be too good to be true.

Belfort claimed that a small minority of ICOs are total scams.

“Promoters [of ICOs] are perpetuating a massive scam of the highest order on everyone. Probably 85 percent of people out there don’t have bad intentions, but the problem is, if five or 10 percent are trying to scam you, it’s a f**king disaster. It is the biggest scam ever, such a huge gigantic scam that’s going to blow up in so many people’s faces. It’s far worse than anything I was ever doing.”

Despite Belfort’s claim, however, several digital currency community members think that the ICOs may be the future of venture capitalism and fundraising.

Are ICOs really scams?

Despite the claims by some members of the virtual currency community that many ICOs are “fraudulent,” the ICO fundraising model has been very successful as a method of raising new capital. Based on data from CoinSchedule, the 202 ICOs which were conducted in 2017 managed to raise more than $3 billion. The majority of the projects financed by ICOs have focused on the development of technological solutions for such industries as finance, entertainment, and data storage.

ICOs are also widely credited for the phenomenal growth rate posted by the entire cryptocurrency market in 2017. Just recently, the total digital currency market capitalization reached a record high of $172 bln, up from just $12 bln in 2016.