Simon Zenios and Co LLC is a law office situated and operating in Cyprus which has been dynamically involved in the fields of ICOs and Blockchain Legal Services.July 28, 2018
The Rising Numbers of ICOs.
The most recent few years have without a doubt seen a substantial increase in the quantity of Initial Coin Offerings (ICO’s) worldwide in what has now unquestionably turned into the latest trend not just for new businesses but also for settled organizations to fund-raise or to support their ventures.
We are still seeing the numbers grow exponentially. To better understand this, in 2017 we saw ICO’s raise $5.6 Billion yet this number accounts for just those ICO’s which had achieved their goals in 2017. By comparison, ICO’s in 2018 have surpassed the numbers from last year, bringing in $6.3 Billion in just the first trimester of 2018! One can simply envision what the numbers will look like toward the end of 2018.
Why such popularity for ICOs?
Mainly, because ICOs are a new form of crowdfunding which have helped bring together companies wishing to raise capital and ordinary individuals from any country and from any background who wish to invest in specific projects which they believe will be successful in the future, something which was not a possibility through conventional IPOs where the privilege to invest was restricted only to venture capitalists.
Furthermore, the organizations or new businesses seeking to fund their projects through ICOs, do so by employing blockchain technology to be used as a platform for the functionality of their projects as well as for the issuance of digital cryptographic tokens which are usually given to investors in exchange for their investment or contribution in the project. Blockchain technology is an innovation which guarantees to change the way the world works by delivering exceedingly secure decentralized platforms onto which organizations can execute their undertakings. The main idea is decentralization, i.e. the world will gradually be moving away from frameworks which are based on the centralization of power.
What the future holds
The fact that the numbers for ICO funding are constantly increasing, without a doubt demonstrate two things. The first is that the popularity of ICO’s is increasing and that subsequently ICOs are establishing themselves as fundraising methods which can be trusted. The second is that such numbers and patterns are hard to disregard by the worldwide market, demonstrating with a great degree of certainty that ICOs and blockchain innovation are here for the long term.
Why running ICO’s in Cyprus is a good idea
Among the numerous well–known jurisdictions for running ICOs, in our experience Cyprus offers some significant benefits which should be taken into account. Evidence of this is the fact that a lot of companies choose to run their ICOs in Cyprus.
Cyprus is an EU Member State and its tax regime -which is approved by the EU – is modern and quite attractive putting Cyprus in the whitelist of tax jurisdictions globally. Any organization running its ICO in Cyprus will be entitled to the considerable number of advantages on offer through incorporation in this jurisdiction but also, what is important is that ICOs are generally unregulated inside the EU something which should be viewed as an opportunity since for now the status quo favors freedom of enterprise.
ICO and Blockchain Legal Services
It is a little over a year since our law office Simon Zenios and Co LLC started offering its Legal and Advisory Services for ICOs which are definitely a new and quickly developing sector of legal practice. In the past year, we have assisted numerous clients of ours who required our legal services and advice on making a success of their ICOs and in the process we had also attended quite a few ICO and blockchain events held in Cyprus, Europe and Dubai.
The past year has definitely helped us identify a lot of the issues and problems facing ICOs particularly when applying to get enlisted on the exchanges. We’ve discovered that these issues are for the most part present because of poor establishments, lack of transparency and non-credibility.
Running ICOs additionally brings up issues concerning the design of the cryptographic token which can’t be disregarded. Contingent upon its design, it is very possible that a token may be viewed as a financial instrument and consequently be subject to financial regulation. This is the reason why it is essentially vital to have advice and support from legal experts throughout the project.
Very few law firms have specialized knowledge in the fields of Blockchain Technology and ICOs and we are one of those firms, and thus qualified to assist our clients and protect their interests.
We as a law firm offer a full suite of legal services for ICOs, whether they are startups or already established companies seeking to branch out into the ICO space.