Raising capital thru an ICO?

by JimQ_official. Posted on Sep 16, 2020    2    5

Anyone raised capital thru an initial coin offering? Issue coins which are backed by the services of your company? What are the benefits of doing this vs going down the conventional route of seed, series ABC, etc.


daidoji70 2

Our company tried to, right at the tail end of the hype cycle a few years ago. I would advise against this. ETH got away with it and a few others, but the SEC and other various Federal agencies have been throwing the book at people who aren't institutional banks and people have gone to jail whose only crime (it appears) was they didn't know what they were doing in regards to securities law, at worst they were actively fleecing people.

If you do go that route get a good lawyer who is well versed in cryptocurrency and modern securities law from whatever jurisdiction you're operating in. If you go into things in amateur hour you will have several Federal agencies all up in your business. It can be done but to do it right be prepared for extensive regulatory lawyering in your ICO process for whatever business you're trying to raise funds for.

https://prestonbyrne.com/ has is a good blogger who blogs about a lot of this stuff. Our company didn't execute the ICO and so thankfully missed all that trouble but it could have been very very bad for us if we had. The easy-ICO route is over.

carter_pride 1

Fucking Government.

  JimQ_official 1

I am considering incorporating my company in a non-US jurisdiction, shall we say "developing country". Does US securities law apply if I vet my investors to ensure no one is a US citizen? Or does the SEC claim global jurisdiction. Sorry for the basic questions. I am not super informed about securities law.

daidoji70 1

I'm not sure. That's def the type of question you need a real lawyer to answer. Trying to operate outside the US will make it harder to get many investors though.

calemedia 2

I think ICO’s got a bad name after so many scammer have used them in the past. The concept is cool but yeah too many scam I don’t see anyone trusting it now day but that’s just my 2 cents