Today, with the initial placement of IOC or coins, almost the life of a crypto coincidence, which is expected to repeat the success of Bitcoin (Bitcoin). Last year, using this method of funding, about 6 billion dollars was raised.
Document with just description - In most cases, there is no product issuing during ICO. But these companies say that the currency or tokens are not securities, because they will be used in future businesses. It is proven that regulators have a different opinion, so in the US, some startups now consider their digital investment currency tokens (or security token) called kriptovalyutnye, so that they can benefit from the exception of the US Securities Act prescribed. (Investment Token can still be found under the name of tokenized security.)
What is an Investment Token?
It is a virtual currency unit like Bitcoin and its competitors. But if Bitcoin is extremely unstable and its value basically depends on the mainstream psychological mentality of the market, investment tokens are linked to real assets - company's capital, real estate or debt obligation.
Thus, issuing such tokens that they fall under the securities laws but make the documents so that the US securities regulations of 1933 fall below the prescribed exceptions under the rules.
Why Investment Token Issues Initially
In this way, they expect to avoid the requirements for complying with the requirements of securities registrations, which are very costly to execute and, in addition, try to avoid excessive attention of the officials and try to escape from uncertainty, which is currently under the IOC system.
The US Securities and Exchange Commission started several IOC checks, suspects that in some cases tokens should be considered as securities, otherwise it is just a matter of fraud. Some companies that the funds can be raised through the ICO method may be forced to return the money to investors, pay a fine or both.
Thus, investment tokens vendors expect that additional efforts made in the preparation stage will protect them from future problems.
How they work
Take the Spice VC, for example, the sponsor fund. He planned to raise $ 100 million, and said he had put $ 40 million in Token's pristels. She acted accordingly:
Rule 506C of Regulation D of the Securities and Exchange Commission - where the conditions under which the securities offer is omitted from the general rules of registration;
The provision of the investment company Law Group 3 (c) (1) of the exchange year, which allows private funding to get out of the SEC regulation.
This means that more than 99 circles of pre-registered pre-registered circulars have to offer security on the SPV VC company's website. It should be ensured that they are rich enough to prove their identification and they do not have the right to sell tokens for a specific time.
In addition, law enforcement applicants must verify that the buyers do not plunder money and publish information about their work after selling them on a regular basis.
Why not all issue crypto coins?
Because if ICO is open to everyone and for everyone, you can collect a lot more money.
Where an investor can buy investment tokens
Most familiar exchange regulators are concerned about the response and still do not sell these types of tokens. In this regard, companies have released a new wave, such as Templa, Polymat and Tezro, which are publishing tokens and planning to open their exchanges. Some of them are already running, others are just getting better.
Spice's own VC project is a platform called securities that "allows you to tokens wealth so that you can trade tokens and increase their liquidity." A Circle Internet Finance Ltd. Recently, as part of trying to enter the digital wealth trading market, Polonix bought the exchange - an introductory that allows people to transfer instant money.