Democratizing access to early-stage capital raising has been the raison d’etre for initial coin offerings since their beginning, but many investors quickly find that some investors are still more equal than others.

Retail investors have discovered it is difficult to dislodge well-funded venture capitalist from their role in capital formation.

“Today, if you look at ICOs, they look like early-stage registered rounds where there are syndicates as well as party rounds in some cases,” said Michael Steinberg, a general partner at venture-capital firm Reciprocal Ventures, during a panel at the Empire Startups conference in Midtown Manhattan. “If you look at March’s figures on the total funds raised through ICOs, 60% of that was done in private sales, which is code for institutional money.”

Steinberg attributed the increased investment by professional money managers to venture capitalists adapting to a new funding model.

“I think that the yearly returns of some of the tokens were so eye-popping and venture capital firms are a pretty curious bunch and they adapted pretty quickly to it,” he added.

The US financial regulators also have tilted the playing field towards professional investors by deeming many ICO offerings as unregistered securities, which often limits participation to sophisticated and accredited investors.

The 2017 ICOs are basically dead, agreed fellow panelist Rod McLeod, senior communications director at Kik Interactive.

“Nobody wants to hear that they cannot do a 2017 ICO,” noted David Concannon, a partner at the law practice of Latham & Watkins and who also participated in the panel. “I deal with frustrated clients all the time. Everyone is advising everyone to do a standard agreement for future tokens (SAFT) and that is kind of where people are going.”

However, the US Securities and Exchange Commission does not like that approach, he added. “If you look at the SEC, it directed subpoenas to exchanges, some ICO issuers, and, most notably, focused on some advisors and a lot of issuers of SAFTs.”

The healthy ICO market outside of the US market just may render the entire regulatory conversation within the US moot.

“It is important to talk about these issues, but I see a lot of people who have no connection to the US or touch US investors and they are the ones who are driving the grass root ICOs,” said Jeannette Spaulding, co-founder and CEO of the Crypto Research Group and the final panelist.