Crypto city
Simone Brunozzi

Great piece and good ICO primer.

There is no question that ICOs are already changing the way capital is raised and new ventures are launched (professional VCs beware)

Yet there are still massive hurdles to overcame for ICOs to get up to full speed. A massive one looming is regulation. One of the most compelling features of crypto assets in the ability to provide smart contracts whereby the owners of the token are enticed to a stream of income for a set amount of time. In essence a “crypto bond”. Unfortunately such tokens would not pass the “Howey’s test” in the US as they would be deemed a security and, therefore, fall under SEC’s approval.

Monaco’s credit card recent ICO was an example of such concept as the owner of the tokens are entitled to a royalty from Monaco’s cards, therefore potentially gaining not only from the appreciation of the token but also from a separate revenue stream. Needless to say US tax residents were blocked from participating in the ICO.

I suspect SEC’s ICO regulation is afoot and we may see some frustration of the ICO’s recent surge, at least in the US. There is no question however in the long run ICOs will become a standard for capital raising as a more efficient and democratic way to raise funding.