On June 22, St. Petersburg hosted the Blockchain & Bitcoin Conference dedicated to the fintech industry. Participants of the conference paid lots of attention to ICO frequently used by blockchain projects. That’s why the event resembled an ICO conference.
It is obvious why the cryptocurrency community is interested in ICO so much. Release of tokens is an affordable way to gather a necessary amount of money for startup development comparing to a traditional IPO. The issuance of shares and IPO cost $200 000, but you’ll need to spend around $10 000- $20 000 on ICO.
Speakers talked about other peculiarities of ICO and cryptocurrencies.
Artem Tolkachev, the director at Deloitte CIS, was the first one to explain operations with tokens. He spoke about regulation of cryptocurrencies and ICO in various jurisdictions. The speaker noted that the American government considered cryptocurrencies and corresponding operations to be property, an exchange commodity, an investment contract or payment services. The digital currency doesn’t have other statuses. Moreover, any bitcoin exchange has to register as a provider of financial services.
The European Union, on the other hand, doesn’t even define the digital currency and has no regulation. The European Central Bank doesn’t consider the cryptocurrency electronic money or a payment system.
At the same time, ICO is regulated in the EU: blockchain projects have carried out ICO under the regulation of corresponding services since June 26, 2017.
According to Artem Tolkachev, there’s no cryptocurrency regulation in Switzerland but blockchain transactions aren’t forbidden. As a result, all operations with the cryptocurrency aren’t subject to VAT.
ICO regulation in Switzerland is at the development stage.
In Tolkachev’s opinion, it is better to carry out ICO in Switzerland, Singapore and in the Seychelles. In Singapore, operations with the digital currency are equal to operations providing services. That’s why they are taxed.
During the presentation, Artem asked who wanted to carry out ICO. Approximately 30% of participants were in favor of it.
The ICO conference gained momentum when Marina Guryeva, Head of the Department of innovative activity at NRU HSE, started her presentation. She presented the analysis of blockchain systems, bitcoin ecosystem and other fintech spheres.
“I believe in bitcoin and blockchain projects. But I’m afraid ICO bubble will soon burst because there are too many villains on the market. However, blockchain will definitely change the future,” said Marina Guryeva.
She concluded that a growing cryptocurrency rate influenced its capitalization. It grew from $15.5 bln to $45.1 bln in the period of January 1 - June 20 2017. The bitcoin exchange is thriving.
Ethereum’s rate increased by impressive 5001% in six months of 2017. If it continues growing at this pace, it will soon be ahead of bitcoin.
Edgar Bers, Polybius Bank representative, spoke about successful ICO conducted by the bank and experience gained.
He identified three stages which are inevitable if the blockchain project decides to attract money with the help of crowdfunding: pre-ICO, ICO and post-ICO.
Employees have to analyze the market, prepare a business model of the company and a legal base for every country where they operate. The PR strategy is developed, articles for publication are written at this stage. The company searches for partners and ICO platforms. A token should be developed.
The main difficulties at this stage are related to the support of the platform’s efficiency and payment processing. The PR campaign goes on, technical failures are eliminated.
The stage features additional emission of tokens and destruction of surplus. Then money on ICO and further product development are distributed, audit is carried out. After the project is launched, the fate of the product is determined: the startup either continues working or returns money to investors.
The ICO conference also featured Alexander Ivanov, CEO at Waves. He emphasized that blockchain would soon appear in all spheres of human life, tokenization of economy will occur. He thinks that ICO is the simplest way for blockchain projects (and not only) to attract investments for development.
“Why is it so popular to issue tokens? Everything’s simple: it resembles venture investments everyone can take part in. In other words, anyone can become a capitalist.
Compared to IPO, the issuance of cryptocurrency tokens can last around one month or close in half an hour. So, the result of investments can be evaluated immediately,” claims Alexander Ivanov.
The speaker defined three main types of tokens:
Though authorities in most developed countries are reluctant to provide regulation of cryptocurrency and ICO, they understand the necessity of it.
Digital cryptocurrencies are becoming more popular every day and if they are not regulated, the cryptocurrency community can face an unprecedented wave of fraud.
The article overviews only a few presentations related to ICO and cryptocurrencies. You’ll have a chance to listen to various topics at the Blockchain & Bitcoin Conference Russia – the most large scale Russian conference dedicated to fintech. It will take place in Moscow on November 15-16.
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