In the past two years, most of the tokens sold in initial token offerings (ICOs) have been branded as utility tokens, and therefore, fall outside the regulatory trading space and do not comply with security laws. Due to this, the majority of the investors, especially institutional ones (e.g. hedge funds, insurance companies, large banks, etc.), have stayed away from the ICO market as it simply does not offer them investment protection.
On the flip side of the coin, if we talk about the ones who have invested in ICO market have lost a tremendous amount of money as most of the ICOs in the past several years were fake (approx 80%) with no minimum viable product (MVP). According to the data, Investors have lost close of $100 million in ICOs in the past two years.
Many Countries like China, India, etc. have banned the ICOs completely, simply because they do not comply with their country legislation, threatens the privacy of individuals, as well as carries a high risk of disturbing the investment market.
So, is this the End of ICO Market?
Yes, most of the ICOs have failed miserably to raise significant funds recently. The experts and fundraising companies around the globe have also understood this fact and are slowly moving towards Security Token Offerings (STOs) as it offers better investment protection and regulatory compliance to investors, thanks to the usage of security tokens.
Lack of inbuilt Compliance and Self-governance is still hurting STO/ICO Projects…!!!
The lack of an inbuilt compliance or self-governance system, i.e., absence of mandatory KYC, AML procedures, minimum lock-in period, accredited investors, etc. in the ICO/STO projects is still deterring investors from putting their money in emerging blockchain-based investment projects or solutions.
As per the reliable research data, only about 28% of the ICO/STO projects listed on ICObench support the usual KYC/AML procedures, whereas just 10% have a minimum viable product (MVP) or prototype to showcase to investors at an early project stage.
DCI Ecosystem- A Unique Cross-Asset Investment Solution Ensuring Regulatory Compliance and Complete Investment Protection
Understanding the investor problems related to lack of investment protection and poor regulatory compliance, DCI has come up with a unique blockchain-powered investment solution that offers high security, transparency, and a trustworthy trading environment for investors with the help of its inbuilt robust legal and governance framework.
In other words, DCI is a unique cross-asset investment solution which offers unlimited investment opportunities to everyone, including private/individual investors, institutional investors, and third-party services providers/ software vendors like accountants, lawyers & legal firms, robo-advisory /AI service provider firms, fund managers, etc.
The investors, fundraising companies, and third-parties in the DCI Ecosystem will benefit from each other by exchanging services in a transparent, secure and reliable way.
DCI is also looking to partner with a list of third-party service providers/software vendors (e.g. robo-advisory/AI service providers, accountants, lawyers, etc.) who will offer their services (accountancy, legal advice & support, robo-advisory etc.) directly to the investors within the DCI Ecosystem. The third party API system will also assist in ensuring online verification and compliance to create a safe and regulated DCI ecosystem.
Role of Feasibility Study, Lawyers and Accountants in DCI Ecosystem
Accountants/Feasibility Study:
Any company or start-up business looking to raise funds via STOs for business expansion and meeting the protect funding needs in DCI would have to first submit all their financial data like annual balance sheets, profit/loss data etc. etc. for complete financial feasibility analysis. Once the financial audit is done by the third-party vendor, the company would be allowed to proceed further with registration.
KYC/AML Support for Online Identity Verification: The investors registering on DCI would also have to go usual KYC/AML procedures in the specific regions to ensure compliance.
Lawyers & Legal Firm Support: Both the investors and fundraising institutions on DCI ecosystem can avail the third-party legal services to stay compliant to the regional or country-specific laws and regulations related to STOs. DCI will partner with a list of third-party lawyers & legal firms that will offer their expert legal advice to companies registered with DCI for conducting STOs properly.
Notary Services: All the members of the DCI Ecosystem availing third-party services in the DCI ecosystem will also get access to notary services to sign a bilateral agreement owing to the exchange of legal and financial services between them.
To unlock more secrets about DCI, please visit the DCI Ecosystem and register on the website: Register Here
Originally published on: DCI Ecosystem Blog