Initial Coin Offerings (ICOs) – essentially, crowdfunding the sale of a digital bearer instrument whose sole record is on a blockchain – threaten to disrupt traditional funding methods, including public offerings and venture funding. Their popularity is blossoming along with the spread of blockchain technology and budding global investor interest in digital currencies such as Bitcoin and Ether.
Louis Lehot and Mark Radcliffe, partners at DLA Piper in Silicon Valley, recently hosted an event and panel discussion on the topic “Is the ICO the Next Killer App on Blockchain?” Special guests included Spencer Bogart, managing director of Blockchain Capital; Juan Benet, founder and CEO at Protocol Labs that makes Coinlist, and just completed an initial SAFT offering for Filecoin; Vinny Lingham, co-founder and CEO at Civic Technologies; Natalia Karayaneva, CEO at Propy; and Matt Chwierut, head of research at Smith and Crown.
Following the standing-room only event, regulatory agencies have intervened and provided some clarifications related to ICOs. First, on July 25, 2017, the Securities and Exchange Commission (SEC) issued a press release, detailed statement and full investigative report that certain tokens would be considered securities. You can learn more about what the ruling means in The Venture Alley blog.
Then, on August 1, 2017, the Monetary Authority of Singapore issued a statement clarifying that not only were certain tokens likely securities, but that issuers must also take precautions to comply with anti-money laundering and terrorist financing regulations.
To Learn more about ICOs and read highlights of the panel hosted by DLA Piper, please click here.