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2017 ICO Recap and 2018 What to Expect



At this point, there are hundreds of listed ICOs in the market and thousands not yet listed.

https://www.smithandcrown.com/icos/


The dominating industries for 2017 have been infrastructure plays at 37.0% ($1,203,761,392.8), Trading & Investing 12.9% ($419,588,257.32), and Finance 9.4% ($307,380,780)

https://www.coinschedule.com/stats.php


With the constraints of the SEC, ICO fundraising has been pushed outside the US, unless the investor is accredited. Or they have files with the SEC. Operating outside the US has also been perilous for entrepreneurs. China required nearly a billion dollars returned to investors from about 40 ICOs. https://www.forbes.com/sites/kenrapoza/2017/09/25/after-crackdown-nearly-every-chinese-ico-returns-cash-to-investors/#976dcda19ff6


2018 may be the year that ICO embraces the SEC. Here are the three ways a company may choose to file:


Regulation A is an exemption from registration requirements – instituted by the Securities Act – that apply to public offerings of securities that do not exceed $5 million in any one-year period. The SEC made new updates to the in 2015 that allow investing in early stage and smaller companies and businesses.

https://www.sec.gov/oiea/investor-alerts-bulletins/ib_regulationa.html


Regulation D (Reg D) is a Securities and Exchange Commission (SEC) regulation governing private placement exemptions. Reg D allows usually smaller companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC.

https://www.sec.gov/fast-answers/answers-regdhtm.html


Regulation S, which was adopted by the Securities and Exchange Commission (the “SEC”) in 1990,1 provides that offers and sales of securities that occur outside of the United States are exempt from the registration requirements of Section 5 of the Securities Act of 1933 (the “Securities Act”). Many ICOs hope to bypass the SEC by blocking IP address in the US and by locating themselves in foreign countries.

http://www.columbia.edu/~hcs14/RegS.htm


ICO will also be more than just ideas and white papers. They will need to be real companies with real customers. The utility tokens or securities they offer will need to be well thought out and offer investors something tangible. Many ICO of 2017 had questionable token economics. It has always been clear why an entrepreneur would wish to sell tokens, but why would anyone buy one? What value do they offer to the investor? Is a token need to facilitate the new ICO platform? Could what they are hoping to accomplish be done without creating a new token?


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