Appcoin Law, Part 1: ICOs the Right Way
I'm pro-appcoin. There, I said it. Haters take note. Other lawyers take note. I think appcoin sales (often called "initial coin offerings" or ICOs) are a new form of crowdfunding and some can have as much legal merit as a Kickstarter or Indiegogo campaign. On the other hand, when executed inelegantly, some can break the law. One of my goals in this definitive three-part series on appcoin law is to help you tell the difference, and share my experience in how to ICO the "right" way. To set the stage, many decentralized products incorporate the use of a cryptographic....
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You may have missed it in 2016, but initial coin offerings, or ICOs, have become the dominant way to fund new cryptocurrency projects. In an ICO, a project sells part of the total token supply to early adopters in exchange for money with which to progress. ICOs have two primary benefits: they provide funding to the team to see the project through, and incentivize a community to contribute (who gain if the project succeeds and the tokens are worth more than they bought them for). Although 2016 witnessed a high number of ICOs, they are not a new phenomenon and some ICOs from earlier than....
The term “appcoin” refers to a cryptocurrency created to be a digital token paired with an application. Originally, appcoins were commonly associated with cryptoequity, but they have increasingly been designed to be essential to the use of new decentralized applications. CoinTelegraph had the opportunity to interview Mike Vine, Technology Evangelist for decentralized content distribution platform LBRY, on appcoins’ increasing use beyond cryptoequity. CoinTelegraph: What is an appcoin? Mike Vine: An appcoin is a cryptocurrency that is designed specifically to power a user application,....
Initial cryptocurrency offerings, or initial coin offerings, (ICOs) are the flavor du jour in the sprawling crypto-tech market. As I've described in previous writings, ICOs represent a fundamental shift in how companies get funded, at least when compared to the traditional venture capital driven methods. What I inferred from that post is that the way forward is a clever combination of both worlds, the old and the new, a point that Zenel Batagelj from ICONOMI picked-up in "ICO 2.0 – what is the ideal ICO?" – a good post that I strongly recommend. For background, I’ve already....
First came bitcoin, then blockchains arrived. Cryptocurrencies and decentralized protocols followed. Now, the ICOs are coming. And the ICO funds are also arriving. And a crash will be forthcoming. To paraphrase Clay Shirky’s famous book title, Here Comes Everybody, a moniker describing how crowds form online as quickly as wildfire. New tokens are being listed every week. Dozens of startups are planning their ICOs, and funds that specialize in these tokens are feeding the investment and speculation frenzy. Even websites offer out-the-box services with which to create, promote, run and list....
ICOs, or initial coin offerings, have garnered substantial attention in the past few months and unsurprisingly the majority of the analysis to date has centered on the debate over whether a particular coin or token should be considered a security, and the technical considerations for setting up such an investment vehicle. In the midst of this, notably absent are the regulatory bodies to provide appropriate guidance in demystifying the treatment of ICOs and carrying out their role as stewards of the public interest. Here's the simple explanation as to why this topic should be at the....