Digital currency, which were based on blockchain technology (data block chain), became a subject of interest both for science, and for the governments of different countries based on the beliefs of the legislative requirements. It all started with Bitcoin, Formerly?? neglected and underestimated at the very beginning. It only took a couple of years, so that he can increase his price to several thousand dollars. In the Land of the Rising Sun, he was recognized as a legitimate means of payment. This is not a fantasy, but the fact is the cryptocurrency market, regardless of the absence of any rules in most states, has become a viable alternative to the securities market.
What is like an ICO
ICO (Initial Coin Offer), from time to time also called IPCO (Initial Public Offering), Is a new method of raising funds through startups. In this case, they do not need to do a serious process of raising capital from venture capital or banking institutions.. Some tokens of the new digital currency are sold to the project's benefactors in exchange for a legitimate tender, but most often for bitcoins either Ethereum. Purchased tokens can be matched with securities of organizations, sold to financiers during the IPO.
ICO is like IPO and crowdfunding. But during the IPO there are investments with financiers, and during the ICO - with people, Maintaining?? specific project, as in the case of crowdfunding. But the difference between ICO and crowdfunding is, that the supporters of the former are motivated by the highest possible returns in exchange for trust capital.
Ethereum is a beautiful example of a successful ICO
Ethereum, like bitcoin, based on blockchain technology. But it's not just digital currency.. Its creator in January 2014 of the year for the first time introduced a new altcoin at the North American Bitcoin Conference in Miami, Florida, in USA. First, it is a decentralized platform for concluding direct contracts between users in the form, in which they were programmed - no downtime possible, Censorship, fraud or exposure to third parties.
A good example is the KICKICO project. This is a startup, which raises funds for the construction of the site, which provides a safe ICO, crowdfunding и crowinvesting. Naturally, the site must be based on blockchain technology, using?? direct contracts between its users. Its corresponding features are: decentralization, transparency and trust. In the whitepaper, the startup creator states, what a similar project, what is its purpose, how much money does he want to win, how many virtual money chips will remain in his hands, what payment instrument or digital currency is accepted and how long will the ICO last.
ICO often has two steps: preICO and corresponding ICO. In the first part, you can purchase new cryptocurrency tokens at a lower cost.. Less capital is collected here, than in the case of the corresponding ICO. KICKICO was launched 29 august 2017 years - the goal was, to get 70 000 Ethereum. The allocated funds will be used to develop and promote the site, also in the PRC, Russia and the USA, also in expanding the team with new employees.
KC, received in return, can also be used to finance other projects, hosted on the platform. In this way, new startups, their games, apps and other products must become part of KICKONOMA, where KC will be used, as a "payment instrument". In this way, the authors of this project have created a rather interesting concept for the popularization of a new cryptocurrency.
Will there be ICOs and digital assets, including cryptocurrencies, regulated by securities laws?
So far, the subject of Bitcoin has been mostly discussed, as a means of payment and security. With the advent of new encryption technologies and block technologies, this issue is already being analyzed at a general level.. As experts, and financial institutions, as well as the governments of individual countries are increasingly forced to, taking into account the current turnover of cryptocurrencies, solve the problem of their possible settlement. In NYC, USA currently has a rule called "BitLicense". According to this rule, activity, cryptocurrency trading, depends on the issue of the license (BitLicense) upon fulfillment of certain obligations by the licensee.
Due to the lack of a unified line of jurisprudence, Florida State Senator Dorothy Hookill in the United States 2016 year in the press officially announced the start of work on the rules, which would accurately define, what cryptocurrency. Its main goal was to protect consumers and startups. In July of this year, the SEC report was published (link is external), which specifies, that the ICOs and digital assets offered there, including crypto currencies, regulated by securities laws. In the European Union, the topic of cryptocurrencies has also been the subject of work of the Commission and the Court of Justice of the European Union.. The first proposed extending the Anti-Money Laundering Directive to virtual currency platforms and virtual currency account providers. Against, The CJEU, in decision C-264/14, decided, that the transaction of exchanging traditional currencies for Bitcoins is beneficial due to the exemption of citizens from taxes on goods and services.
Is it worth participating in the Initial Coin Offer??
Expected, that ICO projects, usually, will make big profits in a relatively short period of time. Thanks to Ethereum, the project actually achieved a higher rate of return, and the authors of the project received the necessary financial resources for further development. However, this cannot be considered a rule.. Cryptocurrency trading is still unregulated - until a general ICO process is established. There are dozens of different sites on the Internet, offering the purchase of a new cryptocurrency. Unfortunately, nobody controls it. Often, potential investors can in no way confirm the authenticity of the site., team and new venture. In this way, they are at high risk, related to fraud.
In most cases, you need to rely on intuition., which is often unreliable. Certainly, you can carefully analyze the project and find information about the authors of the project on the Internet. The information available is usually not verified or monitored by anyone..
Hacker attacks
Another problem is also the numerous hacker attacks. Network hazard is another risk, which investors must face, to invest in this startup. There is no subject in this "business", which indirectly protected your interests. In a regulated market, at least in some part, usually large financial institutions, such as brokerage houses or KNF, guarantee the truthfulness of the information provided and the safety of trade. Existing legal institutions should be used to protect investors and support startups through ICOs, to effectively protect them from capital loss.
Looks like, that in the near future cryptocurrencies will not receive the status of a financial instrument, due to lack of sufficient control over platforms, issuing new tokens. Adding cryptocurrencies to the securities law regime would mean a revolution, for which individual countries are not yet ready. However, this does not prevent them from admitting, that the sale of Bitcoin should be classified as income, And, hence, include a liability to pay tax.
One thing is for sure - the cryptocurrency market is constantly growing and living its own life, regardless of the legislation.. It is a self-organizing machine, consisting of hundreds of millions of Internet users around the world. It's kind of a wild west, so far rampant and uncivilized. Will cryptocurrencies be recognized as a legitimate tender or security? Time will show. So far there is supply and demand.
ICO works in a similar way. At the moment, this is an alternative way to raise capital for startups.. At the same time, blockchain technology is used for this., and supporting project, relying on the success of the given venture, also counts on big profits, associated with the increase in the value of virtual currencies.
