{"id":541,"date":"2018-05-23T18:29:33","date_gmt":"2018-05-23T22:29:33","guid":{"rendered":"https:\/\/www.amp.legal\/blog\/?p=541"},"modified":"2018-06-03T19:28:33","modified_gmt":"2018-06-03T23:28:33","slug":"icos-help-companies-raise-capital","status":"publish","type":"post","link":"https:\/\/www.amp.legal\/blog\/icos-help-companies-raise-capital\/","title":{"rendered":"ICOs Help Companies Raise Capital"},"content":{"rendered":"

An Initial Coin Offering (ICO) gives companies an alternative way to gather business capital\u00a0by offering crypto-tokens to investors. Many ICOs are\u00a0based on underlying cryptocurrencies, such as Bitcoin or Ethereum. The promoters of ICOs believe that crypto-based securities will reshape the financial system.\u00a0An ICO can exist for just about anything. For example, the ICO, PAquarium<\/a>, aims\u00a0to \u201cbuild the largest aquarium in the world.\u201d<\/p>\n

ICOs Raise Billions<\/h3>\n

An article from CoinCentral, Cambridge Analytica Nixes Cryptocurrency Project After Facebook Data Fiasco<\/em><\/a>, by Cole Gibson, describes how firms are raising billions of dollars in ICOs. Gibson\u00a0reported that \u201cfirms all over the world are working on their own coin offerings in an attempt to raise capital.\u201d<\/p>\n

\"\"Gibson\u2019s article\u00a0explains how Cambridge Analytica (CA) planned to raise as much as $30 million in cryptocurrency. Before the Facebook controversy<\/a>, CA pitched to potential investors that the ICO\u00a0would fund the development of innovate ways\u00a0to manage data, which included blockchain technology. Ironically, CA promised that the suite of technologies would give individuals control over their personal data. CA also planned to develop a method for companies to provide full transparency of data sharing to individuals.<\/p>\n

As Gibson\u00a0pointed out, while the future of CA\u2019s ICO is uncertain, companies around the world are in competition to offer cryptocurrency investments. According to Autonomous Next<\/a>, organizations raised $3.5 billion in ICO offerings during the first quarter of 2018.<\/p>\n

Regulation of ICOs<\/h3>\n

State and federal regulators are taking action<\/a> against unregistered ICOs. While BitConnect planned its ICO, the North Carolina Securities Division and the Texas State Securities Board sent cease-and-desist letters to the company. Meanwhile, Bitconnect\u2019s critics accuse the company of running a Ponzi scheme.<\/p>\n

The U.S. Securities and Exchange Commission (SEC) expressed concerns<\/a> about cryptocurrency and ICO markets. The SEC warned potential investors that there is substantially less protection for investors as compared to the traditional securities markets. The SEC also warned that ICOs present a greater opportunity for fraud.<\/p>\n

Future of ICOs<\/h3>\n

The new frontier of ICOs will continue to influence how capital is raised. Solid ICOs may prosper, but many ICOs could face scrutiny from regulators. Before investing in an ICO, an investor should perform adequate research and scrutinize its whitepaper.<\/p>\n","protected":false},"excerpt":{"rendered":"

An Initial Coin Offering (ICO) gives companies an alternative way to gather business capital\u00a0by offering crypto-tokens to investors. Many ICOs are\u00a0based on underlying cryptocurrencies, such as Bitcoin or Ethereum. The promoters of ICOs believe that […]<\/p>\n","protected":false},"author":1,"featured_media":542,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[35],"tags":[59,34,84,60,83],"yoast_head":"\nICOs Help Companies Raise Capital - Cyber Law Blog<\/title>\n<meta name=\"description\" content=\"Cyber Law Blog explores legal topics with technology including privacy law and cybersecurity.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.amp.legal\/blog\/icos-help-companies-raise-capital\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ICOs Help Companies Raise Capital - Cyber Law Blog\" \/>\n<meta property=\"og:description\" content=\"Cyber Law Blog explores legal topics with technology including privacy law and cybersecurity.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.amp.legal\/blog\/icos-help-companies-raise-capital\/\" \/>\n<meta property=\"og:site_name\" content=\"Cyber Law Blog\" \/>\n<meta property=\"article:published_time\" content=\"2018-05-23T22:29:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2018-06-03T23:28:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.amp.legal\/blog\/wp-content\/uploads\/2018\/05\/Crystal-Ball-Nest.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"900\" \/>\n\t<meta property=\"og:image:height\" content=\"500\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Alice M. 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