ICO: to control uncontrollably
How to protect investor rights during the sale of the cryptocurrency crowd
Dutch investor Confido has lost at least $ 374,000. The project web page was closed, the social media account was removed and the project team stopped any communication with their investors. Apparently, the project team photo, biography and, finally, the name, fake.
The Confido case is one of hundreds. In expert forums, when the project team after the ICO and the fundraiser stopped responding to the message, it grew very annoying. Also investors often complain about startup failures to meet deadlines.
For example, one of the largest ICOs in 2017, the Tezos project, has delayed the issue of Tezzies token for several months. Investors doubt the feasibility of launching the project due to conflict within the project team and are immediately prepared to prepare a class action lawsuit against ICO founders. But the results of a misty trial: the crowdfunding method and crypto currency technology used for fundraising have not been mature enough to have established regulatory practices.
The lack of pledge fulfillment, investor rights protection and ICO project audit are the main complaints against new financing methods between regulators and traditional financial market participants.
According to Merel van Vroonhoven, executive of the Dutch Authority for Financial Markets (AFM), "the high risk of fraud and loss of investment in combination with the current hype surrounding ICO is a dangerous cocktail".
ICO criticism comes not only from traditional investors and regulators, but even from traders, who are accused of cheating. For example, Jordan Belfort, who published the memoir of "The Wolf of Wall Street," which was adapted into a film starring Leonardo DiCaprio, stated that ICO is "the biggest scam ever."
"This is the biggest deception ever, big and big deception that will explode on the faces of many," Belfort told the Financial Times. "It's much worse than anything I've ever done." He added: "Maybe 85% of people out there do not have bad intentions but the problem is, if 5 or 10% try to trick you, this is ... a disaster."
Almost all financial regulators of most countries agree that the ICO market should be regulated. The United States, Canada, Singapore has chosen to regulate ICO as a securities market. But under certain conditions: if the project token does not meet the criteria of the securities, they have the right not to register. As a result, this arrangement method does not fully cover the market.
China took a tough stance against ICO which was followed by South Korea. They have issued a ban on crowdfunding through the sale of the cryptocurrency crowd. But this approach will only cause the industry to enter a gray and semi-legal area with sideways financial flows.
From an alternative side, the ICO market does not require centralized regulation, as it can seriously slow industrial development with unnecessary obstacles and bureaucracy.
"For a blockchain project not an external regulation but a market mechanism capable of addressing quality issues in the ICO market", advocates blockchain fan Marina Gurieva during an interview with CoinFox.
Another method of fighting scammers and futureless projects is the assessment procedures and assessment of ICO projects. Today many platforms and services offer to audit ICO projects. They publish reports, estimate investment risks, current market situation in the ICO project sector, founders and team competencies. However, this method comes with its own risks: the service can manipulate the ratings, issue false reports that are bribed by startup projects.
"Too often they give a mark based on lurking methods and for additional payments agree to add a mark", wrote in Telegram German Klimenko, presidential adviser for internet development issues.
One way to protect investors from scam and at the same time not exerting excessive pressure on new industries, is to transfer ICO projects to a decentralized platform, where relationships between investors and startup founders are governed by smart contracts. One of these solutions was developed by Descrow's team.
The solution offered is a decentralized platform, where beginners can launch people sales. Both beginners and investors sign up on the platform. After that investors choose projects that they consider attractive and set the amount of investment. Platform grounding using smart contracts will monitor deadlines that are met and road maps followed.
A key feature that distinguishes solutions from selling people is that the funds collected are not directly and fully transferred to the project team. The project team received only the funds needed to start the development process, while the remaining funds remained frozen. If the investor for any reason decides to continue financing, he will receive the frozen funds back.
If the developers postpone the completion of the current stage of the roadmap, they will be fined 2% of the funds collected during the ICO.
Investors can have insurance against risk: the token holder can recover the funds invested. Insurance claims will be different from the selected risk management program. The compensation fund will come from Descrow's reserve fund, which will be triggered from several sources, including commissions that make payments for ICO lists on the platform.
The ICO market is often compared to the dot com bubble of the 2000s, even when the most prospective startup can easily raise funds without much effort placed on project development.
According to Joichi Ito, director of MIT Media Lab, it is possible to make money out of nowhere, and even if someone wants to create a good company, employees may ask: why should I work if I can do it? none and still receive money. If we delegate the role of the regulator to smart contacts, at least the startup founders will not be able to accept millions of people for not doing anything.
To get more detailed information and Join the Current Descrow Project please visit the following Links:
MY BITCOINTALK PROFILE LINK: https://bitcointalk.org/index.php?action=profile;u=1308879
Postingan
Tidak ada komentar:
Posting Komentar