An Ongoing and Upcoming ICO List is the Tool You Need

Upcoming ICO List

Reddit and BitcoinTalk are flooded with the announcements of new and upcoming ICOs. The market keeps growing, but investors are becoming wary. With approximately 46% of ICOs ending in failure, how do you make sure that you’re investing in one of the 54% destined for success?

An ongoing and upcoming ICO list should be your first stop for finding information about ICO projects. Choose a site that has a robust rating system in addition to an up-to-date list, and you’ll find it easy to narrow your search down to promising projects while leaving the half-baked ideas ...

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Billion Dollar ICO Industry Governed by Securities Law, Judge Rules

Billions of Dollars ICO Industry is Governed by Securities Law, Judge Rules

U.S. V. Zaslavskiy, 17-cr-0647, U.S. District Court for the Eastern District of New York (Brooklyn), just might go down as a definitive case for cryptocurrency enthusiasts. Many, many billions of dollars generated through initial coin offerings (ICOs) are now, according to a federal judge, considered under the jurisdiction of securities laws.

Also read: Philippines Okays PDAX Crypto Exchange

Federal Judge Rules ICOs are Securities

“Per the indictment, no diamonds or real estate, or any coins, tokens, or currency of any imaginable sort, ever existed – despite promises made to investors to the contrary,” Federal District Judge Raymond J. Dearie ruled. “Simply labeling an investment opportunity as a ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract – a security – into a currency.”

Billions of Dollars ICO Industry is Governed by Securities Law, Judge Rules
Maksim Zaslavskiy

Prosecutors in the case are touting it as a first. Maksim Zaslavskiy, a Brooklyn businessman, conspired and committed two counts of securities fraud during two ICOs, they allege. In his defense, Mr. Zaslavskiy suggested the law as written was too vague, and claimed the ICOs in question were currencies, and not, in fact, securities.

ICOs, of course, are a relatively novel and new way for startups to raise capital. Taken from the legacy practice of bringing a traditional company to market through an initial public offering (IPO), ICOs skip over much of the friction IPOs have gathered as more laws and regulations are heaped upon them. Should the same standards apply to ICOs, very few, if any, would survive. ICOs are usually characterized by their lack of officialdom, their appeal to every-day investors without regard to designations such as being accredited. This has made for a wealth transfer revolution, but it has also brought upon investors many scams.

Precedence

The ruling set the stage for a jury to make the ultimate determination about whether indeed an ICO, as put forward by Mr. Zaslavskiy, is indeed a security. The judge did make it clear he believed the case fit well within securities law as presently constructed. The ruling, if upheld, could set precedence for future ICO-related suits brought about by both alleged victims and regulators.

Billions of Dollars ICO Industry is Governed by Securities Law, Judge Rules
Raymond J. Dearie

The defense was hoping to stop the case in its tracks after their client was charged with pushing cryptocurrencies, promising they were backed by diamonds and real estate. Prosecutors could find no evidence to the defense claims, and a judge, rather than ruling on the merits of the case, merely agreed existing law could be applied in this instance if a jury found in favor of the government.

Experts are weighing in on the preliminary decision, insisting this clears the way for the Securities and Exchange Commission (SEC) to get even more aggressive when it comes to ICOs, an industry closing-in on nearly $20 billion raised so far this year. In determining whether a financial product can be classified a security, the SEC often appeals to the a 1946 Supreme Court case which established the so-called Howey Test. Simply put, an asset is a security when an investment of money is handed over to a common business, and that investor expects profits to be siphoned to him by way of another’s toil. Current SEC Chair Jay Clayton, as recently as this summer, has reiterated he believes all such ICOs belong under the securities designation.

Are ICOs securities? Let us know in the comments section below.


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ICOs are increasingly just for venture capitalists

The rollercoaster-get-rich ICOs of 2017 are over — crypto companies are waking up to the idea that VC investors aren’t so bad after all.

Companies used initial coin offerings (ICOs) to raise some $5.5 billion in cryptocurrency-based funding last year. As an emerging investment system with no regulation, nearly anyone was allowed in. The knock-on effect was that many who rode the wave made huge profits, often into the millions of U.S. dollars, as a 10X return seemed to become the minimum standard among those getting crypto-rich.

The trend went into overdrive in 2018, when the price of Bitcoin hit a peak of nearly $20,000 and Ethereum notched $1,200. ICO funding hit $6.3 billion in only the first three months of the year, as noted by Coindesk, but, fast forward six months and a new trend has emerged. Public ICOs, which allow anyone to invest, are increasingly replaced by a new approach of limited, private sales that consist only of accredited investors and close connections. Many ICOs today include no public sale component, with retail investors forced to wait until a token is listed on an exchange.

Private sale only

Telegram’s huge $1.7 billion ICO best exemplifies the change.

ICOs in 2017 began to include a private pre-sale before the ‘open’ public sale stage, the idea being to attract big bucks and in some cases give incentives like discounts. But Telegram opted to keep its entire sale public. It also stuck to accepting money from accredited investors in the U.S. — those who are legally certified to make investments — rather than opening its doors to anyone wanting to own a piece of its token sale.

That’s a trend that has been repeated in other ICOs, including the recent $32 million “seed” round for Terra and its stable coin project. Terra co-founder Daniel Shin explained to TechCrunch that it will hold a second round of private sale investment, but that’ll be reserved for investment professionals and others in the network.

Legally, of course, this makes absolute sense.

The SEC is steadily increasing its crackdown on ICOs, and it has long been standard for companies planning ICOs to overlook citizens of the U.S, China and often other countries where the legalities are unclear from taking part in the sales. But, actually, the rationale of private sales goes beyond legalities.

Professional investor benefits

The crypto industry has woken up to the reality that getting your capital from a handful of professional investors can be more advantageous than a bunch of regular people.

For one thing, dealing with a dozen investors is far easier than a Telegram group that numbers tens of thousands. Professional investors are more accustomed to giving a company money and letting it use it independently, but retail investors in the crypto space tend to be more demanding and unrealistic as they seek a quick return on their money. While liquidity is a major appeal for all in an ICO, VCs tend to hold a longer-term approach than retail investors who look to flip and move to the next money-making opportunity. Or, in times of downturn such as right now, investors have deeper pockets to ride out recessions.

There’s a popular refrain that ICOs mean not having to deal with “Evil Venture Capitalists”, but a community of retail investors is demanding in its own way. Plenty of ICO projects waste time and precious resources putting out mundane press releases that are devoid of news just to produce something that they hope will placate their thirsty community of retail investors, and miraculously give their token a price jump. For example, inking a “strategic partnership” with the American Chamber of Commerce Korea isn’t news — getting actual sales is.

This kind of distraction and allocation of resources makes no sense when you are setting out building a company or a product, which ultimately the founders of these projects are doing. As any experienced founder or investor will say, retaining focus is key in those early times.

Added to that, professional investors can actually help with the building by leveraging their network. Whether that is assisting on hiring in the competitive blockchain industry, introducing potential customers — American Chamber of Commerce Korea eat your heart out — bringing on other investors, etc.

That’s why in the aforementioned case, Terra opted to bring four crypto exchanges into its private sale — no doubt their influence will be key in building what remains a hugely ambitious project. Other companies that raised large ICOs, including TenX and MCO, have publicly expressed interest in holding new investment rounds to bring in professional VCs. That’s because money alone won’t open doors, but often connections can.

To recap: professional VCs can be more trusting, less of a distraction and more useful, but there are some instances in which a more open public approach should be a part of an ICO. That’s when it comes to building a community.

The exception: Community

The term “community” has been thoroughly bastardized by ICOs, but there are some projects that — at least on paper — can benefit by allowing specific types of people, people that will use the product, to get involved early.

Huobi, the exchange, developed a token for its users earlier this year, while chat app Line is also minting a token that it hopes will be used as part of its messaging platform. In both cases, neither company held an ICO, but they did use a crypto token to build a community.

Civil, the startup hoping to ‘fix’ media using the blockchain, is holding an ICO that’s open to members of the public. That’s also a community play, as the CVL token will be required to create newsrooms on its platform, and also to interact with them, such as challenging stories written by reporters.

Other technical projects out there are doing the same — focusing squarely on the community they are building for and adopting lower target figures for their ICO fundraising.

The technology space is so vast that there are exceptions, but it is certainly notable that there are relatively few credible projects planning ICOs that include retail investor participation. A report co-authored by PwC shows that the general pace of ICO investing settled in Q2 2018. If you ignore outliers such as Huobi, Telegram and EOS — the $6 billion project that fundraised for a year — then activity has certainly settled down after an explosive 12-months of growth.

Increased stability is likely to mean that the trend of private sales continues. Traditional VCs are launching dedicated crypto funds and those in the crypto space are formalizing investment vehicles of their own, all while the SEC and other regulators across the world intensify their gaze on ICOs. VC capital is likely to play a more pronounced role in funding ICOs than ever before.

That’s not to say that the retail investment phase is over. Speaking at TechCrunch Disrupt last week, Coinbase CEO Brian Armstrong sketched out his vision of the future in which all company cap tables are “tokenized.”

He foresees retail investors across the world being free to invest in security tokens that operate as a more accessible offshoot to traditional investment systems like the New York Stock Exchange, the NASDAQ etc. Whether that extends to participation in ICOs themselves remains to be seen.

Coinbase CEO Brian Armstrong believes retail investors have a big future in the crypto market

Disclosure: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

UAE Securities Watchdog Approves Plan to Regulate ICOs

UAE Securities Watchdog Approves Plan to Regulate ICOs

The securities and commodities regulator in the United Arab Emirates has approved a plan to adopt comprehensive regulations for crowdfunding through ICOs and recognize tokens as securities. The decision comes after a review of best practices in other countries and signals a change in its position regarding initial coin offerings. Earlier this year investors were warned about the risks associated with tokens sales.

Also read: South Korean Crypto Know-How and Capital Sought by Uzbekistan and Belarus

UAE to Regulate Coin Offerings, Recognize Tokens as Securities

UAE Securities and Commodities Authority (SCA) has approved a plan to regulate initial coin offerings (ICOs) in the country and recognize the issued tokens as securities, its Chairman Sultan bin Saeed Al Mansouri said this weekend, Arabian News reported. Mansouri is also the Minister of Economy of the United Arab Emirates.

UAE Securities Watchdog Approves Plan to Regulate ICOs

The important resolution of the SCA Board of Directors follows the review of a study covering best practices in the field applied around the world. The adopted plan includes a whole set of mechanisms and is part of an integrated project to regulate digital securities and commodities, the SCA’s chief explained, quoted by WAM news agency. It will be set in motion a day after the publication of the decision in the country’s official journal.

The latest move by the securities regulator indicates a positive change in its attitude towards the fintech industry. The watchdog stated that it is part of a number of initiatives aimed at upgrading the financial activities and services in the securities sector in the UAE in order to match the best international standards and practices.

Investors at Their Own Risk, Regulator Warns of Price Volatility

UAE Securities Watchdog Approves Plan to Regulate ICOsEarlier this year, the SCA called upon investors to exert caution towards token-based fundraising activities and other crowdfunding schemes. In a statement released this past February, the authority noted that the terms and features are specific for each coin offering. The same, according to the regulator, applies to the rights acquired by those who fund the projects.

The SCA also stressed that ICOs are speculative, warning that the prices of the tokens may be highly volatile. It told investors that their involvement in this type of crowdfunding is at their own risk. The watchdog also urged organizers of initial coin offerings to seek legal and regulatory advice to ensure the compliance of their projects with applicable laws and regulations in the United Arab Emirates.

What are your expectations for the future of cryptocurrencies and crowdfunding in UAE? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock, Revolut, Stealthy.


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The Daily: EU Urged for Common Crypto Rules, EEU Ready for Common Crypto

The Daily: EU Urged for Common Crypto Rules, EEU Ready for Common Crypto

A Brussels-based think tank has urged the European Union to adopt common crypto regulations. Its report will be reviewed during this week’s meeting of the EU finance ministers in Vienna. Also in The Daily, the Eurasian Economic Union may adopt a single settlement currency, possibly a crypto, Samsung Pay offers a tokenized money transfer service in Russia, and Transfergo launches remittance payments to India using DLT technology.

Also read: Luxury Car Dealership Accepts Bitcoin, Basketballers to Earn Crypto

Think Tank Calls for Universal EU Crypto Regulations

The European Union, a politico-economic behemoth that often finds it hard to agree on common policies on anything, from immigration to taxation, has been called upon to adopt universal regulations for crypto exchanges and clear rules for crowdfunding through initial coin offerings (ICOs). In a report, the Brussels-based think tank Bruegel argues such an approach would put risks under control while creating conditions to exploit the industry’s potential.

Worried about some innate peculiarities of the space and the technology, including the volatility of young crypto markets and the associated risks of fraud and money laundering, EU leaders and institutions have nevertheless refrained so far from discussing and developing a comprehensive pan-European regulation, citing the relatively small size of the sector and the crypto-euro trade. There are indications this attitude could change as the report in question has been prepared for the Union’s finance ministers’ meeting this Friday and Saturday in Vienna, as reported by Reuters.

The Daily: EU Urged for Common Crypto Rules, EEU Ready for Common Crypto

Despite the bearish market trends this year, crypto trading and investing has increased in the EU, so has the interest in ICOs – member-states account for 30 percent of the projects funded through digital token sales. This will surely press Brussels to take a closer look at the regulatory challenges. Austria, the current EU president, is now asking its partners whether the applicable EU regulations need to be updated.

Bruegel suggests that entities dealing with cryptocurrency and related instruments, such as crypto exchanges, should be subject to stricter disclosure rules. However, the think tank notes that crypto companies seeking favorable business climates in jurisdictions like the EU-member Malta might need to be tolerated for some time in order to “experiment and learn about the best approaches to this fast-developing technology.”

EEU May Adopt Single Currency, Ruble or Crypto

The Daily: EU Urged for Common Crypto Rules, EEU Ready for Common CryptoThe Eurasian Economic Union (EEU) is in a position now to create a common settlement currency for the region, according to the Eurasian Development Bank (EDB) board chairman Andrei Belyaninov. During a Eurasian Media Congress in Almaty, Kazakhstan this week, he said the situation across the union today is extremely advantageous, for which he expressed gratitude to US President Donald Trump’s administration, Arka news agency reported. He elaborated:

The sanctions appeared to be instrumental in our efforts to consolidate internal resources, create a single economic space, form infrastructures within this space and develop them… We are in a position to create a regional settlement currency. I believe that it should be the ruble, although there are other points of view, for example, a blockchain-based currency.

Belyaninov admitted the EDB is currently a “bit aggressive” with its plans across the EEU and complained the bank’s initiatives are hampered by what he called “incompetent and illiterate judgments” about the current situation in the economic markets. EDB has an authorized capital of $7 billion USD and is supported by Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.

Revamped Russian Crypto Law Ready for Discussions in October

The Daily: EU Urged for Common Crypto Rules, EEU Ready for Common CryptoThe draft law “On Digital Financial Assets” will be submitted for public discussions in early October, Alexei Guznov, Director of the Legal Department of the Central Bank of Russia, told journalists on the sidelines of the Forum of the Association of Russian Banks. The version that will be presented is going to be the one that deputies will accept for a second reading in the lower house of Russia’s parliament. Three bills aimed at regulating different aspects of the crypto space were voted on first reading this spring, with their final adoption scheduled for the fall session of the State Duma. Russian lawmakers have been trying to synchronize the drafts to produce a comprehensive regulatory framework.

Samsung Pay Offers Tokenized Money Transfer Service in Russia

Mobile payment service Samsung Pay is now offering a tokenized cashless transfer service in the Russian Federation, local media reported. Samsung Pay is partnering on the project with Visa, Mastercard, and Multikarta, and the Russian Vneshtorgbank (VTB) will be the acquiring bank. When making a transfer, a randomly generated token will replace the card number thereby protecting the clients’ personal information, mitigating the risks of the data being intercepted by third parties.

Transfergo Launches Remittance Payments to India

The Daily: EU Urged for Common Crypto Rules, EEU Ready for Common CryptoPayments provider Transfergo has announced the launch of an instant payments service to India using technology provided by Ripple. The company notes that Transfergo Now is available for users in Europe who will be able to order real-time money transfers to India, considered the world’s biggest receiver of remittances. The issued press release does not specify the technology underpinning the system but a number of financial institutions, including leading Indian commercial banks such as Kotak Mahindra and Axis bank, are among the users of Ripplenet. The blockchain-based Xcurrent software which enables the transfers on the platform does not use XRP, Ripple’s centralized altcoin.

What are your thoughts on today’s news tidbits? Tell us in the comments section below.


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Make sure you do not miss any important Bitcoin-related news! Follow our news feed any which way you prefer; via Twitter, Facebook, Telegram, RSS or email (scroll down to the bottom of this page to subscribe). We’ve got daily, weekly and quarterly summaries in newsletter form. Bitcoin never sleeps. Neither do we.

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