Initial Coin Offering (ICO) – A New Way of Corporate Financing

On the evening of 31.08. a Meetup with the topic “Initial Coin Offering (ICO) – A New Way of Corporate Financing” took place in Berlin – BTC-ECHO was there.

Astratum, who had already organized a Meetup before, had organized a Meetup with the support of the Innovation Forum Blockchain and the Blockchain-Bundesverband, which took a look at the regulatory framework of ICOs.

He explained the function of a Bitcoin profit review

The event was opened by Sven Laepple, who first gave a basic introduction to the onlinebetrug topic of the Bitcoin profit review. Thus he explained the function of a token: In addition to value retention and investment options, an increasing proportion of crypto currencies, especially tokens based on ethereum, primarily fulfil the function of a means of payment within a platform, so to speak as the fuel of a project. An ICO therefore also serves the fundraising of the Bitcoin profit review issuing companies, which can finance its blockchain project with the revenues from it. In addition, it is characteristic of an ICO to address potential investors who are already crypto-users, as they have experience in the crypto market. It is fitting that within the framework of an ICO the new token is usually offered in exchange for other, classic tokens (Bitcoin, Ether). Sven also mentioned the difficulty of the masses to easily enter the crypto business. Just imagine how much the market capitalisation of crypto would increase if these hurdles were to fall.

The first lecture of the evening by Nikita Fuchs entitled “Bringing the masses to ICO” was also devoted to this question. He briefly and concisely presented the problems for potential new investors (high price fluctuations, availability, storage) and above all dealt with an entry barrier: Registration in an exchange in compliance with the KYC and AML regulations is an unbelievable deterrent for many. Since anonymity no longer exists through these regulations, Nikita encouraged the development of systems that enable and simplify the purchase of crypto currencies directly with a credit card.

Legal security for Bitcoin profit scam

The next lecture dealt with the topic The speaker was Alexander Lange from Early Bird Capital. He first spoke about the disadvantages of classic risk financing and the difficulties faced by founders. These include time expenditure, access to Bitcoin profit scam finance and the risk of investing incorrectly. In addition, potential investors tend to look at the short-term potential of the project, which is why a good idea with a stringent concept behind it does not automatically lead to a successful foundation. Instead, this type of investment would tend to promote the formation of monopolies and would result in an immense concentration of power among the investors of popular corporations (Facebook, Google).

On the other hand, crypto currencies, which have the advantages of high liquidity and universal accessibility compared to traditional financial products, are on the rise. In addition, many of them in the form of Smart Contracts are subject to their own legal security, independent of judgements. However, the lecturer sees problems in the too rapid capitalisation within the framework of an ICO as well as in the inconsistent regulation.

So is the classic venture capital model obsolete due to the emergence of crypto currencies? The most recent development rather shows the emergence of a hybrid structure in which traditional and institutionalised investors are also active on the crypto market and tokens are available the other way round not only through mining and crypto exchanges, but also in funds or through traditional financial market participants.

The legal situation of tokens in Germany was discussed in a lecture by Arnab Naskar and Dr. Nina-Luisa Siedler entitled “Self Regulation and German Legal Perspective”. The lecturers were absorbed in a very detailed way into topics of jurisprudence. Legal dimensions to be considered in relation to crypto currencies include security, data protection, financial supervision and consumer protection. A precise legal classification of crypto currencies becomes problematic: By definition, they are not bound by central banks or fiat currencies, but are accepted by users and merchants as means of payment and storage of value.

There is no overarching legal framework for crypto currencies, each country has its own – or none at all – legal security for tokens. For an approaching ICO it is therefore important to consider in which legal area the token is offered, since this is decisive for the legal treatment.