Some 16% of all cryptocurrency projects are 'highly questionable', presenting obvious red flags for investor security, according to a report published early this week.

In an expose by the Wall Street Journal, at least 15% of all initial coin offerings (ICOs) studied were found wanting, with at least 513 of a sample of 3,300 found to be overpromising, misrepresenting elements of the offering or the personnel involved, or plagiarised from other ICO prospectuses.

In the report, WSJ journalists took a sample of ICO and crypto projects from listings on ICOBench.com, Tokendata.io and ICORating.com. The researchers compared the text of whitepaper documents against the total sample and uncovered as many as 10,000 sentences in ICO whitepapers that had been directly plagiarised, which most knowledgeable investors would consider a clear sign something is amiss.

Reverse image searches were carried out on founder and sponsor profiles, uncovering a number of fake and stock identities being used throughout investor documentation, while others were found to have no information about those involved in the project.

The team then scoured the whitepapers for claims of "high returns", before manually reviewing the promises made in the documents to determine which were making unrealistic claims to entice investors to part with their cash.

Offering the chance to respond to the allegations to the 513 identified as potentially suspect, the Wall Street Journal received little in the way of response—250 project websites were already unavailable, while at least 30 projects were already under active investigation by the authorities.

The findings coincide with increasing efforts from financial regulators worldwide, like the U.S. Securities and Exchange Commission (SEC), in clamping down on fraudulent activity around ICOs.

While some have criticised the SEC in particular for their hardline stance, the regulator remains committed to cleaning up the sector to protect investors from falling victim to these scams.

One of the most comprehensive investigations of its kind to date, the findings confirm what many in the cryptocurrency sector have long suspected—that a significant portion of ICOs are downright fraudulent.

When combined with those that were offered in good faith, but with flawed business models, this underlines the serious risks faced by those investing in initial coin offerings.