Passers in encryption: preliminary offers (something) and its regulations

You definitely know what group financing is, right? Someone shares a project or personal circumstances on an online platform, and whoever wants to help him or invest in his initiative can donate some money. Well, the crowds do not differ in encryption, but it is always related to investing in a new idea, and always includes buying newly distinctive symbols.

In order to be more specific, the crowds in the encryption space is a way to collect donations as the project based on DLT provides the original symbols (their team created) to the public in exchange for the well -known cryptocurrenciesLike Bitcoin, Ether, or Fiat Money, such as the US dollar or the euro. This process usually occurs before launching the entire project and is often part of the ICO width or a similar distribution event. The crowds allow the first supporters of supporters to obtain symbols at a fixed or gradual price, and the money collected generally is used to finance the development and deployment of the ecosystem of the project or the statute.

By the way, ICO was the most popular type of Crypto Groumentsale a few years ago. Between 2017 and 2018, he was responsible for showing everything that could happen in this new and unorganized model.

Record

In terms of Layman, ICO happens when someone decides (which can be, literally anyone who has the Internet and the minimum level of coded illiteracy) assembling a web site, some social channels, and if we are lucky, a white paper, to provide a kind of new encryption projects for potential investors (i.e. someone who has the Internet, too). These investors will buy a group of distinctive symbols that have been recently recruited to finance this project, and if things go well, their symbols will get a lot of value in time. There are no laws, no limits, and no requirements for more than the encryption portfolio and a dream.

Excluded. Yes, things are often worse. In 2017 and 2018, ICOS exploded in popularity, and soon became a way for Crypto Startups (and the money) to raise funds. What started quietly with projects like MasterCoin suddenly turned crazy, with the early Ethereum success explains the capabilities: the first buyers paid only $ 0.31 for each spirit – now at a value of about $ 1,600. Large names such as Tezos, Filecoin and EOS have collected millions (up to billions), and it appears that anyone has a mysterious white sheet and can secure some marketing marketing in minutes.

But behind the noise, problems have grown. Many teams had no work product and still walking in millions – some of them never wandered. Report 2018 by Statis Group I found that approximately 80 % of ICOS from the previous year were frank fraud. By the end of that year, prices decreased, confidence and financing evaporated Dried up By 95 % in 2019. Icobench. In the end, governments interfered with strict rules, in an attempt to protect investors and clean chaos.

ICOS regulations

After 2017, organizational agencies all over the world began to scrutinize ICOS due to increased concerns. Governments responded in various ways. China and South Korea have imposed a complete ban on ICO, while others, such as Australia, New Zealand and France, issued organizational guidelines or work frameworks were provided. The United States followed an approach to each case separately, largely driven by the Securities and Stock Exchange Committee (SEC), which began to classify some ICOS as unregistered securities offers.

A major tool in the evaluation of the Supreme Education Council is Howy TestThe legal standard used to determine whether the financial transaction is qualified as an investment contract, and therefore, as safety. If the sale of the distinguished symbol includes an investment of value in a joint venture, with profit expectations from the work of another person, it is likely to pass the test. Many ICO, especially those who promote future profits or development promises, have fulfilled these standards. When they did so, they caused strict securities laws and regulatory requirements.

This scrutiny led to many prominent folds. One example is Block.one, the company behind EOS, which raised more than $ 4 billion through ICO and then settle With SEC for $ 24 million. Other projects, such as Centra Tech and Munke, have been fully closed or close. SEC also Explained These promotional approvals, such as those made by celebrities, should reveal payments to avoid misleading investors.

The organizational pressure was also installed and the investor education was installed in the old model, the encryption space was adapted. New models such as the distinctive symbol shows appeared (StOS) and the initial exchange offers (IEOS), with a focus on compliance and the protection of the investor. These alternatives have indicated a shift towards more healthy donations.

New crowd models

People are still launching and participating in ICOS, but today’s encryption projects are also used Types of crowds To raise funds, each with distinctive methods and levels of censorship. The distinctive code offers for security (STOS) depends on symbols backed by concrete or financial assets, such as real estate shares or companies, and are subject to the laws of securities. These symbols represent property rights or financial advantages and must follow strict regulatory frameworks, especially in the judicial states such as the United States

StOS often requires investors ’adoption, ensuring that specific thresholds or specific asset sills are met. This approach provides legal protection and is closely consistent with traditional investment models, but in a symbolic form. On the other hand, the initial exchange offers (IEO) and the initial Dex offers (IDOS) are alternatives that go beyond some regulatory obstacles. This last type, in particular, is largely fortified against most of the regulations because the money is treated in a decentralized way, and users must verify the red flags themselves (liquidity pools, smart contracts, etc.)

IEOS is organized through central exchanges, which manage the distribution of the distinctive symbol and require projects to meet certain existing standards, such as clear white paper and technical preparation. In contrast, IDOS is on decentralized exchanges (Dexs), providing instant liquidity and wider access but often with less supervision. Both options allow for non -approved investors, although IEOS may be more selective due to the participation of central platforms that operate as a gateway.

Other models such as the first farm offers (IFOS), Inos NFT offers (IGOS) games (IGOS) collective financing to Defi, digital holdings, and games. IFOS usually requires users to contribute a liquidity gathering using the original icons of DeX in exchange for early access to the new symbols of the project. Inos includes the sale of NFTS that may bear ownership or access privileges, while IGOS focuses on games related to games or symbols. Most of these models avoid the need for the approved investor status but still carry risks due to market fluctuations and limited regulation, similar to the original ICOS.

Accredited investors

As mentioned above, some new cryptocurrencies models regulating investors require their approval. The accredited or verified investor is a person who meets specific financial or professional criteria that allow them to invest in the non -open opportunities for the general public. Depending on the place where you live, the requirements may vary. In the United States, for example, you usually need a net value of more than one million dollars (except for your home) or an annual income of at least $ 200,000 in the past two years.

In the world of encryption, Accredited investors It gained importance after the ICO boom and the chaos of 2017. To reduce the risks and compliance with advanced regulations, many encryption projects began to reduce the collection of donations for investors who have been verified only. Matchs such as StOS and some iEOS now require the approval of the participants. This is particularly true when the royal codes are represented in the real world or follow the laws of securities. Although this access is narrowed, it also helps in building a more worthy environment for both investors and creators.

If you want to participate in all the types available to collect donations for encryption, then check the status of the accredited investor (if you are one) is the key. in OBYTE Environmental SystemThis process is simple and safe. Within the OBYTE portfolio, you can find Chatbot “Investment Investment Investment” in the chat menu – the robot store. If you meet the US requirements to be approved, Chatbot helps you check your condition using documents such as financial data or messages from a licensed professional. The certification of obyte dag is published, so if the crowds are made on the OBYTE platform, you will not need to share your documents again – just prove verification. This opens access to a broader set of investment opportunities while preserving decentralized and transparent things.

Photo of distinguished vectors by Macrovector / Ferbik