Category: ICO

Which is the best option for a project to raise funds?

An offering is basically a marketing term that denotes the issuance of a company’s securities at times when its profitable shares are made available for purchase to the public.

The various kinds of offerings available at the market today for a company to raise funds needed for its business growth or development include IPOs, ICOs, STOs, and IEOs.

With the immense market craze of cryptocurrencies in the year 2017, ICOs went global and gained enough buzz in the crypto business space. But due to the lack of regulatory regimes, they have been facing a lot of scam or fraudulence concerns in the market over recent years. This has made the investors become skeptical of the industry.

The regulators around the World have tried to protect investors and to address the challenges of ICOs by stepping their efforts in establishing some crucial regulations in the world of investments. As a result, STOs were getting into the market with absolute regulations and with a pass in the Howey test. They have made the scams hard to exist.

ICOs not only paved the root for the emergence of STOs but also the IEOs. A unique feature that the IEO models bring in to the investment market is liquidity.

IPO:

Initial Public Offering is a traditional fundraising model that signifies the fact that a privately-held company is going public by selling its shares to the institutional or retail investors for the first time in the stock markets like Nasdaq or NYSE (New York Stock Exchange). It gives rise to the chances for secondary share offerings in the future.

ICO:

Initial Coin Offering is a kind of cryptocurrency funding mechanism that allows startup companies to raise their business capital rates by selling tokens or coins to the investors or speculators in exchange for some other standard fiat or cryptocurrency types such as bitcoin, litecoin and ethereum and so on. It has been revolutionizing the upcoming economic/financial models for a variety of businesses across the Globe.

IEO:

Initial Exchange Offering is also a kind of fundraising mechanism, where a third party or partnering cryptocurrency exchange works by selling tokens on behalf of a blockchain startup.

STO:

Security Token Offering is a token sale process with enhanced security. In an STO, security tokens are issued to the investors in return for their valuable investments. STOs came as gifts for those investors, who are more serious in their investments as they are highly regulated and secure.

Chief differences – IPO, ICO, STO, and IEO:

  • In general, well-settled or developed companies make IPOs or STOs, whereas the new startups make ICOs or IEOs.
  • In terms of offerings: IPOs account for share trading, whereas ICOS, IEOs, and STOs account for token or coin trading.
  • IEOs, STOs, and IPOs possess significant mitigation towards the legal risks but ICOs do not.
  • STOs and IPOs are highly secure with enough regulatory standards, whereas, IEOs, and ICOs are not that much regulated (less-regulated).
  • IPOs offer stocks to the shareholders/partners, whereas the STOs, ICOs, and IEOs offer security and utility tokens to the investors.
  • In cases of IPOs, ICOs, and STOs, the concerned company possesses a direct control over the token sale event. But, in the case of an IEO, an intermediary exchange controls the token sale process to represent a startup company.
  • STOs are highly transparent and secure with faster listing abilities in comparison with the alternative fundraising mechanisms like ICOs, IPOs, and IEOs.

Conclusion:

Every fundraising option has its own unique merits and demerits. So, do perform deep research and always be cautious before selecting an option for making investments.

Though ICOs have some security concerns on one side, they have a lot of advantages on the other side.

Thus, a promising, simple and recommended option that suits the best for all kinds of businesses with considerable benefits is the ICO.

In order to launch your ICO, you can better go for a market-leading ICO service provider like Shamla Tech. If you do so, then they would certainly help you out with exceptional ICO development services that you have ever seen before in the market.

Source: Initial Coin Offering Solutions

Initial Coin Offering (ICO) Regulation in 2019 Trends, Developments, and What Lies Ahead

ICO (Initial Coin Offering) projects have been struggling hard over the recent years to achieve their ultimate business objectives due to various issues like scams, lack of transparency and lack of awareness about crypto market values. This gives rise to the birth of innovative trends in crypto regulations in the year 2019, which are listed as follows:

Invasion of institutional money has boosted up the credibility of ICO projects. Moreover, it has paved a way for the quality ICOs to acquire huge funds, as ever seen before.

Global regulation metrics help projects to thrive into the path of international crypto regulations, instead of being fitted inside the existing legal boundaries of respective countries.

Influx of IEOs (Initial Exchange Offerings) has made AMLs, KYCs and some other compliance strategies to be in-line with the crypto market’s regulatory needs, since exchanges take the partial responsibilities of the token sale events in this case.

Entry of STOs (Security Token Offerings) imported additional safety and security to the ICOs.

Arrival of professional ICO management platforms has made the management process (both before and after the sale) of a crowd funding event simple, easier and bit more customized than before.

Boom of ICOS and the need for regulating them:

ICOs arrived into the crypto market by the year of 2013 with the launch of ‘Master coin’. At the start of the year 2016, a study revealed that around 8.8 billion US Dollars have been raised via ICOs. While getting to know this fact, numerous IT enterprises had started showing their interest in organizing fundraising events. Also, the worth of ICOs got much more enhanced after Telegram’s colossal success with an outstanding fund rising rate of around 1.7 billion US Dollars.

The continuous innovations and improvements in technology and digital assets are meritorious on one side, but have brought increased risks of fraudulence issues on the other side. Such risks associated with the initial coin offerings multiply on a daily basis, as the crypto market in our country is not yet regulated enough unlike the other traditional capital markets. Thus, as a result, the regulatory systems were established to eliminate the risks appropriate to the crowd funding concepts.

Every crowd sale ICO event should fall within certain regulations to make its operations legal and successful. Here, the regulations denote a specific set of rules that define the dos and don’ts while running ICOs. It has been strongly suggested that the exploitation rates in ICO launches can be reduced only when the ICOs try to be strictly compliant with the necessary regulatory standards.

One of the important regulatory paradigms for ICOs that need to be cited out is the demystification. In the recent past, many start-up companies viewed ICOs only as disruptions for the venture capital sector. But now with the immense momentum gained by ICOs, companies realized that they are the effective means of raising funds for a business. Also, they have started believing the fact that the lack of regulatory oversight would certainly lead a business to a risky path.

Also in the past, ICOs were pushed into some uncertain pitfalls due to the absence of clear regulatory regimes. But at present, the situation has been changed with the introduction of certain legal regulations from the Governmental side. Of course, the Government is now insisting both the investors and token offering companies (involved in an ICO project) to be more cautious in abiding perfectly with the regulatory rules to eliminate the risk factors.

Conclusion:

As far as the Indian Government is concerned, ICO regulations have been revising and improvising the financial sector at a rapid rate. Also, while considering the present market scenario, the latest trends and developments in ICO regulations bear a strong potential in directing our businesses towards the path of righteousness, thereby helping us to attain our desired goals and profit rates. Hence without any doubt, it has been made clear that the ICO landscape is growing with a mature phase in 2019, together with the fortified regulations.

Source: Initial Coin Offering Solutions