Regulation of ICOs: the end or beginning of a healthy market?
| 29-9-2017 | Carlo de Meijer |
One of the hottest – and also one of the most controversial – things in the crypto currency environment are so-called Initial Coin Offerings or ICOs. ICOs, which employ the use of crypto currencies, have become a popular means of fundraising for start-ups in recent months. The increasing need of blockchain technology and the lack of regulation allows them to raise money quickly in return to so-called tokens (also described as digital certificates). This hype has driven a steep rise in this sector’s market value, reaching a high of $177 bn.
The latest cryptocurrency boom however is beginning to stall as a growing number of regulators worldwide turn their attention to the ICOs world and have decided to come into action. China recently decided even to ban these ICOs. And others such as the US SEC, Singapore, Hong Kong, Russia and others followed soon though in a more lighter variant.
Is this the end of fundraising via ICOs or should it be seen as the beginning of a healthy market?
ICO hype
ICOs have become highly popular. In the past months there has been a complete hype around ICOs. ICOs have allowed digital currency start-ups, to raise millions of dollars quickly, in many cases from ordinary investors. The ICO fever is especially triggered by the success of Ethereum, the platform that invented the digital currency Ether. Already in 2014 Ethereum arranged a very successful ICO.
More than $1,6 billion has been raised worldwide from these ICOs up till now. China for example has seen 65 ICOs and 2.62 billion yuan ($400 million) raised from more than 100.000 individuals so far in 2017.
Read the full article of our expert Carlo de Meijer on LinkedIn
Economist and researcher
