ICOs: Newest Trend In Fundraising
It was 2009 when Bitcoin became the first decentralized cryptocurrency in the world, and ever since then it has brought many changes to the global economy. The fact that more and more companies embrace the use and exchange of cryptocurrencies shows how much popularity it has gained throughout the years. If you fast-forward 4 years to 2013, you will encounter another big trend – ICOs.
ICO, which is an abbreviation of Initial Coin Offerings, is considered to be the hottest trend in crowdfunding for startups. It is a chance to trade cryptocurrencies against crypto coins having liquid value, such as Bitcoin or Ethereum. It also gives startups the ability to avoid costs of regulatory compliance and intermediaries.
Ever since the cryptocurrency prices skyrocketed in the past year a lot of regulations have been made. Cybertheft, trading halts, market manipulation are just some of the factors which made governments create these regulations.
- In 2017, the Australian Securities & Investments Commission issued guidance stating that the legality of an ICO depends upon its detailed circumstances.
- In the same year, seven Chinese financial regulators officially banned all ICOs within China, demanding that the proceeds from the past ICOs be refunded to investors.
- In France, the Autorite des marches financiers was working on regulations governing the use of blockchain technology in capital raising transactions.
- The Financial Services Commission of South Korea prohibited ICOs in September 2017 and promised “stern penalties” for violations.
- The Swiss Financial Market Supervisory Authority announced an investigation of an unspecified number of coin offerings in September 2017, examining if they were in compliance with Swiss regulations.
Many predictions have been given about how ICOs are going to continue.
In this year, ICOs will aim to raise smaller amounts of money compared to last year, and the figures should be between $2M to $10M. ICOs will continue to be adopted, as authorities are defining limitations and regulations. They will become more trustworthy and experienced investors are going to get involved in them.
Take a look at the infographic below to learn more about the basics of ICO roundups and what makes them good or bad.
This informative piece was put together by BTXchange.io