I understand the confusion. For many folks prior to April/May 2017, Initial Coin Offerings (ICO’s) were essentially foreign language. Those that come from a stock market background know what Initial Public Offerings (IPO’s) are. They occur when a private company seeks for equity financing to the markets. Initial Coin Offering’s (ICO) follow a similar structure but for two different purposes. Create a new coin which is different to Bitcoin and has it’s own unique feature or create a new project, for which to work a special currency is needed. The equity is raised via crowdfunding, so everybody can take part of it. Later on the bought equity can be sold on some specific crypto exchanges. This is similar to startups, so you invest in the idea behind it and hope they get profitable. A crypto equity is equivalent to a crypto token.
This has gotten a lot of attention from regulators and it comes to no surprise. Read about how an entrepreneur got a call from the SEC when he announced the crowdfunding
. They are mainly looking at ICO’s that should be classified as securities instead of tokens. I will be keeping close tabs to regulatory news for future editions of this newsletter.
ICO’s to watch in the near future
For those that don’t reside in the US and are interested in investing in an ICO, there is quite the list to go through. Some of the major ICO’s have already happened but still some gems to be launched. Monetha’s
(MTH) token sale launches on August 31. This project boasts an all-star technical and business development team to include former PayPal executives. The project will allow merchants to accept cryptocurrencies leveraging smart contracts. Based on the information saved during the transaction, clients and merchants will be able to file/solve a claim, rate each other, view ratings etc. Their history is then recorded onto the immutable Ethereum blockchain so that others can make well-informed commercial decisions.