How to register ICO?
What does ICO stand is Initial coin offering and it is the revolutionary way to raise the funds for the blockchain based startup through selling the relative tokens to interested investors and contributors. Registering ICOs can be the ho-hum task as different countries have different regulatory policies for ICOs. All blockchain ICOs are decentralized autonomous organization and it does not require any sort of registration in the first place as per the definition of DAO. But the decentralization and irregular framework of ICOs made it vulnerable to scammers and hackers.
That’s why several governments have imposed several regulatory policies and one of them does require ICO Company to register it with government’s financial framework. For instance, if you are in the USA then you will have to register with SEC and The Foreign Account Tax Compliance Act (FATCA) under the data protection act, especially you are publishing security tokens. You will need certain documents and acquired license from these regulatory bodies. If you are in Switzerland, you must have to register or acquire approval for your blockchain ICO from the Financial Market Supervisory Authority or FINMA of Switzerland. A number of countries have shown openness to ICOs by changing their regulatory processes and they are made necessary when you are dealing with security or equity tokens.
But when you are planning to launch ICO for utility token one may not need to go through certain regulatory processes as it does not deal with company’s ownership or securities like gold etc. But again even after being regulated, the chances of ICOs being vulnerable does not go any down.
What is an ICO?
You’ve probably heard of an IPO before, an ICO is a little bit different. During IPO investors buy stocks which translates into ownership shares of that company. But in an ICO or an Initial Coin Offering, they buy cryptocurrency tokens. Likewise IPOs, ICOs have a fixed start and end date, and often there is a bonus structure involved with investing earlier. For instance, investing at an early stage may get an investor 10 to 20 percent more of crypto coins.
In summary, ICO is when a blockchain company has an idea to build something new (product or service) on blockchain but unlike typical businesses, the blockchain company raises capital from the general public similar to crowdfund instead of going to venture capitalists, angel investors, and private investors. And instead of handing them equity or shares of their company during an IPO, in an ICOs they distribute the tokens. In short, ICO is the method of announcing new crypto coin, funding blockchain based startups and raising capital for them.
Deciding which cryptocurrency to invest in, if any, can be a little bit confusing. There are more than a thousand cryptocurrencies in circulation right now with more being introduced almost every day.
During an ICO there is two kind of tokens you can buy. The first is utility token. It meant to be used to buy goods and services offered by the company that developed by that cryptocurrency. This is just like when you go to arced and exchange money for game playing tokens. They meant to be used in the machine at that particular location and nowhere else.
The second type of token is called security token. That does mean they are safer. Security refers to financial securities. You are buying in the companies like you would in IPOs but you don’t the equity that comes with regular stocks. So why would you be buying? The expectation is that those tokens will eventually worth something once that company develops the way for people to spend them. If demands go up early investor can sell their token for profit. But until that happens you are taking a bit of gamble. ICOs are still not clearly regulated as IPO in the US and most other country making it a bit easier for scammers to take advantage.
How to write the white paper?
By Definition of initial coin offering, white paper is an authoritative report or guide that represents the company’s philosophy, erudite developer team, and their unique approach to solving the particular problem regardless of industries with devoted to details to convince the investors and help the users to utilize the company’s product and service. Whitepapers
In summary, whitepapers mean that it is the tool that a company can use to showcase the potential of their product and services, project roadmap and how their development team with their product/service will overcome the issues related to certain industries in form of step by step guide. When it comes to writing initial coin offering white paper, there are two most important factors one need to consider – White paper format and white paper templet. Both of these can be varied depending on your concept of executing the idea to solve an industrial problem. When it comes to how to write the white paper before your ICO countdown starts one need to develop an idea regarding the core content and white paper format by observing the number of great whitepaper examples available on the internet.
Try to cover the every single aspect regarding your blockchain based product, focus on details, embed it in enticing white paper templet, explain the complex concepts with data charts and diagrams, state a problem and solution in manner that it is the only possible, efficient and cost-effective solution compared to other resources, and finally describe the future planning of the company. Writing Initial Coin Offering white paper has never been easy and still isn’t easy. Keep educating and researching yourself by studying popular white paper examples and create your own masterpiece.
Is there any regulation for an ICO?
ICOs are ultimately DAO which means they are not regulated by any central authority or government and hence no one can decide, besides the ICO publisher itself, that how many tokens will come to life and how many of them will stay in circulation. This involves quite a large risk factor for the investors and made it hard to decide for them whether to invest in ICOs or not.
Several nations have taken quite a welcoming action to overcome this issue and changes their regulatory policies. For instance, USA has made it compulsory that each ICO that involves the personal data leverage of their users has to acquire the license from the SEC as part of KYC means. Though one needs to know that if you are just distributing the utility token instead of security token one does not have to go through US SEC. But if you are thinking about circulating the security token which represents the ownership of the company has to follow the norms defined by SEC.
Countries like China and South Korea has banned the whole ICO because they are vulnerable and scammers can easily take the advantages. Countries like UK, Canada, and EU have also welcomed the ICOs but with some sort of norms and regulations. While the countries like India, Japan and few more have shown neutral behavior towards whole ICO things. So it depends on your geographical location when you want to know whether ICOs are regulated or not and of course, type of tokens an ICO company is aiming to circulate.