When people hear the term Initial Coin Offering, a few things come to mind. Cryptocurrency is probably one of the biggest trends today both online and on print media. The high acceptance of the digital currency by the general public continues to birth ideas like the presale of cryptocurrency coins or a blockchain project. This idea has gone to become a very successful instrument in raising funds for new application development. This article explains the meaning of Initial Coin Offering- ICO and the current trends.
Initial Coin Offering Explained
Initial Coin Offering just means that some individual offers investors some units of a new cryptocurrency in exchange against other crypto-tokens like Ethereum or Bitcoin. ICOs have become a tool for cryptocurrency development since the year 2013. The token pre-created is sold and traded on all cryptocurrency exchange as long as there is demand.
Ethereum ICO was a successful one, and this has caused more people to continue to initiate and encourage development funding by releasing the crypto-token and integrating it into the project. Because of the rapid adoption, Initial Coin Offering could go on to become a currency of a whole financial system. The potential of ICOs growing to become the securities and shares of tomorrow is a great possibility.
A Brief History on Initial Coin Offering
It is possible Ripple the first Cryptocurrency distributed by an ICO. Ripple Labs began developing their payment system which created about 100 Billion XRP token. By selling this token to investors, the company was able to fund the project development.
Later that year, Mastercoin began working towards creating a layer on top of Bitcoin for secure execution of smart contracts and tokenize Bitcoin transactions. Many other cryptocurrencies have been funded with Initial Currency Offering, and many smart investors are looking to join the trend and share the proceeds.
The legal state of Initial Coin Offering
Legality has somehow been an issue when the topic of ICO is mentioned. The token is not being sold as a financial asset but as a digital right. The funding of an ICO is not often regulated, but the process can be made easy and paperless provided an experienced lawyer in setting up an Initial Coin Offering.
In any case, some jurisdictions are well aware of ICO funding and tend to regulate them just like securities and shares. Some people argue that in the future, Initial Coin Offering will most likely be controlled and that could bear some financial and legal risks for the investors, hence the need for legal advisors from experienced ICO law firms.
Finding law firms that help with Initial Coin Offerings has become easier than ever before. According to Lionel Iruk, “there are lots of companies that consult for ICOs.” His law firm has helped in consulting for more than 20 ICOs so far. “By no means are we the only ones out there, so we recommend doing some research associated with your particular ICO.”
Lionel Iruk is a managing partner at Empire Global Partners and the Iruke Law firm, a multi-national consultancy and Law firm focused on helping clients set up Alternative Financial Fund-Raising structure, such as ICOs, legally and lawfully all around the world.