Mike Novogratz, former Goldman Sachs partner who now runs a crypto merchant bank dubbed as Galaxy Digital Holdings, recently

“There was a lot of fraud, and there was a lot of hype, and people lost money,” stated Novogratz. “The Securities and Exchange Commission (SEC) was behind the curve, so they slammed on the brakes.”

“But the SEC doesn’t want to kill this innovation; we’ve spoken to them at length,” he added.

Novogratz believed that the ICO market is in the process of detoxifying itself, especially after an increase in scrutiny and crackdowns by the SEC. The bitcoin bull stated that the ICO market would undergo a complete overhaul before reappearing as a more compliant space to work in.

“I think you’ll see a market for security tokens—a real estate portfolio that gets tokenized, for example,” he explained. “These aren’t things that go from $1 to $1,000. They’re things that yield 14 per cent, and they’ll be sold to qualified buyers. That sounds a heck of a lot less sexy, but you’re going to see that business grow.”

Novogratz is not the first finance veteran to have declared the death of the ICO space. Earlier, Barry Silbert also said something similar on the lines of the Galaxy founder.

The ICO market is dead — over,” the Digital Currency Group founder had told CNBC on November 27. “You now have the lack of demand from ICOs. And you have all the sponsors of the ICOs who raised a bunch of bitcoin [and ether] that are now starting to sell that.”

ICO Not the End of Crypto

Nevertheless, like Novogratz, Silber also said that the end of ICOs does not necessarily mean the end of cryptos.

“We’re 5, 6, 7, times through this now,” he said. “The first couple of times you see your balance sheet drop by 80 per cent, it’s kind of rough on the stomach. By the third or fourth time, you get used to it. Now we view this as a fantastic opportunity.”