Customer Protection is the key to a regulated public offering market. Behind every regulation, behind every guideline, the guiding principle is to protect the customer. At OiX, the primary aim for their Securities Offering standard is to ensure all investors (accredited or otherwise) have the complete knowledge of all the pertinent information before they invest. All reasonable efforts are made to ensure that these recommended guidelines are followed by the promoters to avoid any future brushes with regulations and to ensure that the investors are well informed.
Who exactly are you investing with?
Promoters matter. Their experience and expertise matter. They matter more so in blockchain securities because they are not backed by existing legal framework. It is imperative for the investors to have a better know-how of the person or the company behind the offering. It is a good idea to investigate their background before investing. A good qualified team with experience means that they will be able to utilize the funds, which they are taking from the Public Offering, better.
What is it that you are investing in?
It is also a good idea to check whether they have provided a detailed and complete description of the product/service or not? You need to check if they have a whitepaper in which a clear business plan is written in a way that is easy to understand. It is the whitepaper that carried bulk of this information. A clear business plan is what you primarily invest in. Do not invest in a scheme where they are selling comb to a bald man. It is important to know who is promoting or marketing the product and how it is done and by using what means, no matter how attractive their products look, you must get ensure by having a detailed knowledge of their background as it will guide you correctly, never forget to double check if they are working within the norms of the non-blockchain equivalent product or not? One must confirm if they are the real owners of the company or they are just a marketing company that has been paid to promote the product?
Location Matters
Location of the enterprise is an essential part to be taken into consideration while investing. You must be extra cautious of jurisdictions that have bad record of protecting customer rights. You will be surprised how many jurisdictions simply side with the organization bringing them tax money and employment.
Even your location matters. Please check if Bitcoin or blockchain tokens are still legal in your country or not. Because some countries have already levied strict rules and regulation for Cryptocurrency and blockchain projects and even some have banned the trading of cryptocurrencies.
Where is the money going?
It is imperative for all the investors to ask the company about the flowchart of the investments to know where their invested money is going and for what purpose will it be used? Many companies have hidden clauses and conditions, which often end up costing the investor plenty. So you have all the right to ask if Company is going to use your money in its expansion and growth or will it be used to “cash out” others? “Cash Out” is not necessarily a bad thing if the company is going through a spurt of growth and initial investor feel it is the right time to encash their profits.
Disclosures
In the case of a traditional public company you know about the financial position and the stability of the company by looking at their periodic financial statements. This is, sadly, absent in the case of a blockchain security. If the company you have invested in, doesn’t provide you their financial statement, then you have all the rights to ask for it. Some Blockchain standards like Initial Securities Offerings as proposed by OiX.Global has the clause of Investor relations well laid out and it works to the advantage of the investors. However, many a times the Financial Statements are not enough to know the current financial position and credibility of the company, especially if the company is a startup and has no historic data to show for. This would be the case in most ICOs as the companies often take money just based on a future promise. In such a scenario you have to go back nd look at their cash outflow plan to see where the money is going to be invested. That will give you a good idea of how well thought over the ICO is. .
Conclusion
It is an uncertain market and yet, best returns can be found only in uncertain markets. It is the simple “No Risk No Returns” philosophy. Event at that, when you are going for investment, go for one which does not have unnecessary risks. In the long run, they are the best investments. So, if you have to invest in ICOs look for a platform that offers “securities” and not just tokens. Also, do not invest in any ICO that does not offer proper disclosures. Hidden facts are shady.
Invest in LEGAL ICO — OiX.li / OiX.Global