Preparing for your ICO, don’t you mean IPO?
Gemini, run by the Winklevoss twins announced it has hired Robert Cornish, formerly of the New York Stock Exchange, as chief information officer.
The sentiment everyday I hear on CNBC is, “when institutions come into this space then we will see a break out in prices again!” But the question is when and why is there reluctancy now?
A lot of us have used the Gemini Exchange and have had an overall positive experience moving USD to ETH/BTC then accessing the world of alt-coins. But, we are all a tiny decimal of the market in market capitalization. Institutions are going to foster the adoption of tokens to mainstream exchanges and broker accounts.
When I say institutions; it isn’t some big, evil corporation or capital group. A lot of “institutions” are just a group of individuals with a common investing goal and have relationships with the underwriter (banks) for the IPO issuance. This makes trust and audit requirements easier for the underwriting bank.
If we take a step back there are a requirements for running an IPO and being listed on the New York Stock Exchange (NYSE):
1) Financials must be proven and reported; Profit and Loss (P&L) statements, minimum requirements on revenue and company history
2) Securities and Exchange Commission (SEC) disclosures for founders with over 10% ownership
3) “Cooling-Off” Periods that are the time when preliminary prospectus is filed with the SEC and actual trading. A lot of the times this allows early investors exit purchase agreements within that set time period
With the Winklevoss’ twins announcing the hiring of Rob Cornish, formerly of the New York Stock Exchange as their new Chief Information Officer; we can see the tide shaping for regulation for token sales and token trading.
What does means for the crypto market? Simple, more liquidity flowing into this space. There is increasingly more scrutiny on companies that want to launch an Initial Coin Offering (ICO). Investors will demand to see past revenue, business plans and if they do not have that, it will be more like an episode of the Shark Tank. Valuation and raise amounts will similarly mimic Kickstarter and IndieGogo campaigns, not a $4 billion-year-long ICO like EOS. This also means that when banks start to underwrite valuations for the ICO, platforms like Fidelity and ETrades will be more likely to offer our favorite tokens for purchase by signing on to their trading platform.
Platforms will need the Know-Your-Customer and legal process that Bridge Protocol can provide for accredited investors and retail traders. With our tool in place and testing with our partner Onfido that supports the likes of Square, Uber and others; we are poised to have a blockchain, automated platform that reduces costs for exchanges and IPO participants in the coming months.
