As ICO’s are drawing more and more attention to investors outside the blockchain ecosystem, the demand continues to grow. When tokens are issued to the investors, various blockchain focussed companies are raising capital to turn their business idea into reality. By going directly to the public for funding, it can be raised at a low cost.
A company generally issues a token on a blockchain which can represent as everything which is of value like bond or shares. ICO’S are referred to a process to handle the automatic distribution of tokens to the investors and direct payment processing in cryptocurrencies. Moreover, those tokens can be easily transferred peer-to-peer and listed on various cryptocurrencies exchange platforms to ensure the asset’s liquidity.
We know that ICO projects are at early stages and various Businesses who have done investments, they are also not without risk. The potential for fraud is high and many ICO’s currently fall outside regulated space.
As various investors grow beyond blockchain insiders, we will see increasing demand for more compliance. That’s why choosing the right business structure from a legal perspective needs to be thought about from inception to divestment and tailored to each business. There’s no one-size-fits-all solution.
Currently, there are none the cryptocurrency that has the same standing as a traditional stock exchange, that places the listed tokens outside the regulatory reach. However, ICO’s draw more attention and more investors outside of the blockchain ecosystem. Thus, the demand for ICO will continue to grow as regulators and various other businesses increasingly understand the cryptocurrency industry.