Head of International Corporate Law and Fintech Practice
Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.
ICO SUPPORT
ICO SUPPORT
ICO is the initial sale of tokens. If an entrepreneur wants to open a crypto company abroad, he should issue digital coins developed on the Blockchain platform, which will then be exchanged for crypto, such as Bitcoin. The launch of an ICO is one of the key factors in the development of an offshore crypto company.
ICOs work
Startups make money by creating and selling cryptocurrencies, which are called tokens. An ICO involves selling shares of your company to investors.
ICO takes place on a blockchain platform. At the same time, the software has an open-source code that is visible to everyone, and it allows you to create crypto-assets using smart contracts. Investors purchase tokens and send cryptocurrency to developers within the network.
Which is better, ICO or IPO
An IPO is used by companies that sell part of their shares as a way to raise money. There is another way – to open a public company abroad and receive money from private investors through the sale of IPO – the sale of shares.
ICO is different. It exists exclusively within cryptocurrency crowdfunding. Companies get the opportunity to collect crypto and open their projects on it, paying tokens of their project in return for investments.
Pros and cons of ICO
To gain an understanding of ICO, one needs to know the advantages and disadvantages of this fundraising method.
Benefits of holding an ICO
- A large territorial spread of potential investors who do participate in the ICO.
- Fundraising from investors can reach millions of dollars (in crypto-assets) in a few minutes.
Disadvantages of the ICO procedure
- There is some risk that the regulator will require more stringent conditions for fundraising.
- Most ICO investors are accustomed to quick deposits in crypto and are usually impatient, unlike ordinary investors who buy strictly stocks.
Pros and cons of ICO for an investor
Pros and cons of ICO for an investor
Advantages:
- Participation in the ICO increases the liquidity and growth rate of the company.
- Depending on the project, there may be a large network like Ethereum behind it, which accelerates the growth of capital.
- Saving money without intermediaries. Those who have private keys own the crypto. ICO coins are also anonymous, just like BTC and ETH. The way of investing in ICO partially protects against upheavals in the politics and economy of many countries.
- Ownership of an alternative asset that is not based on regular money ( fiat ).
Disadvantages:
- The presence of requirements that must be met limits the actions of the investor.
- Crypto projects that raise money through ICOs are usually immature and created by inexperienced professionals.
- Scam. ICOs are easier to conduct, which is why there are many fraudulent projects that collect investors’ money and then disappear.
- Prohibition of ICO by a number of countries, such as China, in order to preserve the current financial system.
Launching an ICO project in an offshore zone
Entrepreneurs who create their own cryptocurrencies or issue blockchain coins must go through several stages.
- Analyze the project and choose the type of token.
- Choose the appropriate jurisdiction.
- Get the right licenses if they are needed for a particular jurisdiction.
- Justify the ICO procedure from the point of view of the law.
- Create company documents such as RoadMap and WhitePaper.
- Create the most appropriate legal construction of the token.
- Prepare documents before issuing a token.
- Create and adapt software.
Legality of ICO
To conduct an ICO as correctly and efficiently as possible, we recommend that you seek advice from experienced lawyers. They can also accompany the ICO project from start to finish. This is necessary to avoid any problems with documents and difficulties in promoting the company.
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