ICO risks (as promulgated by Singapore Monetary Authority)
ICOs (Initial Coin Offerings) as I’ve been saying are the “Go To” method at the moment for Blockchain and Fintech companies to raise funds for their Ecosystem.
Scotcoin was one of the earliest adopters of the view that Crypto Currencies would be regulated, and we have been and continue to be working towards making Scotcoin fully Know Your Customer (KYC) and Anti Money Laundering (AML) compliant.
So it is no surprise that countries as diverse as India, the United States, China and so on are discussing and promulgating regulations to cover what is presently ungoverned.
Now the Singapore Monetary Authority, one of the most respected in the world, has turned towards ICOs. They are careful to draw a line between ordinary Crypto Currencies, and the wilder ICOs. We are almost at the South Sea Bubble moment of “ to undertake an endeavour, the knowledge of which shall not be divulged,” where money was raised for something no one had any idea of.
Their warnings are about “foreign and online operators,” “sellers without a proven track record,” “insufficient secondary market liquidity,” “highly speculative investments,” “investments promising high returns” and “money laundering and terrorist funding.”
These are all most laudable sentiments. In essence, anyone can launch an ICO, and we know greedy, gullible people will put money into things to make a fast buck. You only need to think of One Coin, which has hoovered up millions in a giant Ponzi scheme. And it isn’t even a crypto currency as it sits on no blockchain.
So let’s examine the points in relation to where Scotcoin hopes to be heading in the next three months or so.
- We are clearly NOT foreign operators. We are a Scottish based Community Interest Company, supervised by OSCR ( Scottish Charities regulator)
- We definitely ARE online. We are a Fintech focused Blockchain company and can be found on twitter @scotcoinproject, or on Facebook at https://www.facebook.com/scotcoin/
- We have a track record. We have taken Scotcoin from a total value below £40,000 to a present value of around £7,000,000
- Insufficient secondary market liquidity. We are addressing this so that Scotcoin will be exchangeable for Bitcoin or Sterling instantly online.
- Highly speculative investments. Scotcoin is not a get rich quick scheme. Our vision is to assist Scotland’s SMEs to expand and thrive, and grow acceptance and use of Scotcoin
- Investments promising high returns. We make no promises. The value of investments can fall as well as rise.
- Money Laundering and terrorist funding. As I said at the beginning of this article, Scotcoin has long believed that holders of Crypto Currencies should be KYC and AML checked. We already do this for anyone who buys more than a few pounds worth of SCOT.
So there you have it. We are already either complying or in the process of complying with all of these warnings.