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Are Initial Coin Offerings the next killer app on the blockchain?

Fuseworks Media
Fuseworks Media

Initial Coin Offerings - essentially, crowdfunding the sale of a digital bearer instrument whose sole record is on a blockchain - threaten to disrupt traditional funding methods, including public offerings and venture funding. Their popularity is blossoming along with the spread of blockchain technology and budding global investor interest in digital currencies such as bitcoin and ether.

Up until 31 July 2017, there have been 92 ICOs collectively raising US$1.25 billion, and in recent months ICOs have outpaced global angel and seed stage Internet venture capital funding. More important than the crowdfunding feature is the embedded incentive to create an initial user base for digital products and services on the blockchain, which defines a 'utility token'.

ICOs are a global phenomenon and have allowed blockchain start-ups around the world to raise large amounts in a matter of hours. Here in New Zealand, we have been working closely with our colleagues in the US, the UK and Asia to advise issuers (in both NZ and overseas) on the regulatory aspects of ICOs across multiple jurisdictions.

Louis Lehot and Mark Radcliffe, partners at DLA Piper in Silicon Valley, recently hosted an event and panel discussion produced by DareToKnow founder Sam de Brouwer around the topic 'Is the ICO the Next Killer App on Blockchain?'. Special guests included Spencer Bogart, managing director of Blockchain Capital; Juan Benet, founder and CEO at Protocol Labs that makes Coinlist, and just completed an initial SAFT offering for Filecoin; Vinny Lingham, co-founder and CEO at Civic Technologies; Natalia Karayaneva, CEO at Propy; and Matt Chwierut, head of research at Smith and Crown.

See our highlights of the standing-room-only panel hosted by DLA Piper, including the viewpoints of executives from companies that recently completed ICOs.

If you have any queries about ICOs, SAFTs, token-generation events, or blockchain and their regulation in New Zealand and elsewhere then please contact one of our experts.

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