What is an ICO (Initial Coin Offering)?
ICO represents a new way of crowd investing that allows promoters to accumulate certain amount of funds for developing and enhancing blockchain start up projects. For example, in consideration of funds received from purchasers, the latter obtains tokens that may be used in numerous ways depending on the specific nature of ICO projects.
ICO projects might be a long process requiring legal, marketing, software developing. Therefore many projects forget to:
- Make partnership with the developers;
- Collect and formalize all the intellectual property;
- Choose optimal corporate structure optimizing taxation;
- General Data Protection issues processing the personal data;
- Prepare terms and conditions with the potential token holders.
Legal Experts of Legal Kornet has gained considerable experience assisting in launching ICO projects on different stages. Beginning from drafting the White Paper and ending with the help to buy back the funds from the scam projects.
Besides that, we have partners in many jurisdictions including US.
What is an STO (Security Token Offering)?
In General, STO can be described as a form of investments of blockchain projects, which has a number of significant advantages in comparison with ICO. Thus, security tokens are tied to real securities, thanks to which the holder is granted a wide range of rights, including: ownership of shares, payment of debts, the right to vote, etc. In this regard, STO assumes the issue of digital assets in full compliance with the requirements of securities legislation.
What is the IEO (Initial Exchange offers)?
IEO (Initial Exchange offers) is a new improved version of ICO (Initial Coin Offering) providing optimized output of tokens to the listing. A key role in this case is played by crypto-currency exchanges, acting as direct intermediaries in the purchase of tokens in the IEO.
Thus, within the framework of IEO, the exchanges conduct preliminary technical and audit checks of each project, carry out an investment assessment of its attractiveness, legality and further potential. At the same time, persons wishing to purchase tokens do not send funds to a smart contract as an ICO, but register on the exchange and after that, make purchases using their personal account.
Legal Kornet would be assist you with:
- Full legal structuring of your ICO / STO / IEO;
- Understand the Legal Nature of Cryptocurrency;
- Consult on any cryptoprojects;
- Undertake legal support of mining projects.
What is the Token?
Token is something that ICO project issues in exchange of the virtual currency.
There are many types of blockchain tokens, each with its own characteristics. For example, one type of blockchain tokens may be used to support functioning of an application designed for it. That is utility token.
Another type of tokens may be utilized as a virtual (digital) currency (protocol token) that serves as a certain medium of exchange not only within the specific blockchain platform but also beyond that.
Finally, security token. That is a digital asset, the purchase of which vests the owner with a number of rights which are similar to securities such as bonds or stocks.
An inherent feature of any token is to be tradable on a “secondary market” of tokens on a cryptocurrency exchange market. That is to say, a token is free for sale and once it has been issued, a token is subject to market speculations according to the rules of supply and demand.
However, there are a number of complicated legal issues concerning tokens since some of them may fall under the definition of security instrument and, therefore, be subject to US federal or state securities laws. This means that sale of such tokens may be unlawful for US residents.
Professionals of Legal Kornet have arranged more than fifteen analysis on the nature of the token and have come to different conclusions. It is important to note that such analysis can make only US Attorney.
