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Free Crypto Airdrops Are a Real Thing… Here’s Some Happening Now (March, 2018)

Free Crypto Airdrops Are a Real Thing… Here’s Some Happening Now (March, 2018)

A company giving out free samples to entice new customers

is nothing new. But giving out free currency, or shares of their company? That sounds a bit suspicious… Turns out, in the Cyrpto world, it’s nothing new. From Dogecoin to Bitcoin, many developers relied on on free “faucets” to entice their first users (the original BTC faucet gave away 5 BTC just for filling out a captcha…)

More recently, companies have begun “airdropping” as a means of promoting their business and encouraging trading of their coin. This just means they’ll send free coins to a wallet address you provide, typically in exchange for a small favor on your end, like retweeting a post. I’ve rounded up 5 of the most promising airdrops for January and February; each offering between $1-10 USD just for clicking some buttons. Before we hop in, however, here’s what you’ll need to claim your tokens:

Airdrop Checklist

To avoid giving out too much private information, I recommend setting up special accounts for airdropping. Each company has different requirements, but here’s what you’ll need to get all 5 offers:

  1. Email Account
  2. Ethereum Wallet Address: To deposit your tokens. Create one instantly at MyEtherWallet.
  3. Twitter Account: Consider setting one up specially for this purpose
  4. Telegram Account: Telegram is a mobile chat app many companies use to communicate with users. You’ll need to install the Telegram app on your smartphone.
  5. Phone Number: Set one up free on Google Voice if you want to avoid giving out private information. Only 1 airdrop required a phone number (HedgeConnect), but they didn’t verify it anyway.

Now without further adieu, here’s the current airdrop offers for March, 2018:

Lino (LNO)

Estimated Value: $1–10
Lasts Until: Unspecified, Spring 2018
To get 15 LNO tokens, simply follow the link, follow LINO’s Twitter page and retweet a message. You’ll also be given a referral link you can share to earn 5 additional tokens for every new user.

Sphere (SAT)

Estimated Value: $2.50
Lasts Until: Unspecified, Spring 2018
Sphere is aiming to create a decentralized social network. They’re offering 50 SAT tokens free when you sign up. Just follow the link, create an account and confirm your email address. Tokens are currently selling for $0.05 each, making this airdrop worth $2.50 before the official launch.

Shivom (OmiX)

Estimated Value: $9
Lasts Until: End of March
Shivom is running a very limited airdrop, supposedly valued up to $9 USD, according to Airdrop Alert. Simply follow the link, join the telegram and retweet 2 messages from Shivom. The tokens are due to distribute in June after the ICO sale.

House Panda (HPT)

Estimated Value: $1–5
Lasts Until: Extended to May 2018
To sign up for this airdrop, you’ll need to be on your mobile phone. Follow the link to join their telegram channel (download the telegram app if you don’t have it already) and type “/claim” into the message window. You’ll get an immediate response that includes a link to redeem your token, and a referral link you can use to earn extra. To redeem your tokens you’ll actually be given a 12-digit code. Because HPT has not actually launched yet, you’ll this code to claim your tokens in February, after their initial coin offering. Write it down or copy/paste to save it in a safe place!

RobinHood

Estimated Value: $3–150 (no joke)
Lasts Until: Indefinitely
Okay, so this isn’t exactly cryptocurrencies, but the stock-trading app RobinHood is giving away 1 free stock when you sign up for their platform. You don’t need to deposit any money, or even provide a credit card/bank account number. Simply create an account, and claim your free stock. Most free stocks are worth around $5, but Robinhood is transparent that 1 in 100 will receive an Apple, Facebook or Microsoft stock, which are valued around $100–160 USD. Cryptocurrencies are also coming to the platform soon, and may be a part of this promotion in the future.

Unlike the other airdrops, Robinhood will require your full information, including home address and Social Security Number. Don’t be alarmed; they are a completely legitimate brokerage company simply complying with federal regulations. Robinhood will track your investments and send a 1099 at the end of the year (similar to Vanguard, Fidelity, or any traditional investment platform). But personally, I’m looking forward to using a trading platform that will make tax time simple, compared to the clusterf**k that crypto-taxes are turning out to be.

Some of these airdrop promotions provide me with extra tokens/stocks for referring other participants. I do not work for or represent any of these companies; referral fees are simply a way to earn a small income from my writing and help support my blog. Thanks for reading, and be sure to check back for next month’s airdrops!

Fela Oparei

Fela Oparei

Business writer by day; coin trader by night. This blog is for my semi-professional thoughts & insights on cryptocurrency investing in 2018.

https://medium.com/@cryptofela/free-crypto-airdrops-are-a-real-thing-heres-some-happening-now-9d50df6a5c82

Thomas Prendergast

Binance CEO Calls ICOs Necessary And ‘100 Times Easier Than Traditional Venture Capital’

Binance CEO Calls ICOs Necessary And ‘100 Times Easier Than Traditional Venture Capital’

Changpeng Zhao, the CEO of digital currency trading platform Binance,

said in a blog post May 7 that initial coin offerings (ICO) perform far better than venture capital funds (VCs), even with a high risk of failure. In a blog post titled “ICOs — Not Just ‘Good-to-Have,’ But Necessary,” Zhao expressed his support for ICOs claiming they are

“100 times easier” for raising money than traditional VCs:

“Through my own experience, and watching hundreds of other projects at a close distance, I would say raising money through ICOs is about 100 times easier than through traditional VCs, if not more. With the ease of raising money increased, logic says there may be 100 times more startups, well-funded startups, where ICOs are allowed.”

Zhao said that while some VC investors are real experts in their field, the great majority of “professional VCs” have “no clue” about the projects or fields they invest in. According to Zhao there is a notable absence of startup experience and insufficient understanding of projects’ technologies. Zhao admitted that the ICO market is in its early days and therefore is encountering problems, including scams and failures. He still believes that “compared to ‘traditional VC invested projects,’ a larger ratio of ICO projects will succeed.”

He wrote:

“Most ICOs are new startup projects, and have a high rate of failure, just like in traditional startups. This is nothing new. Most ICO investors already know this. ICO investors are early adopters (and learners).”

Zhao concluded by mentioning that many VC groups are now investing in ICOs. He said that VC groups “have their nose on the money”, adding that they are more “nimble” than other large organizations which are responsible for public wealth; “the faster movers will reap exponential benefits.” Cointelegraph previously reported that American venture capital firm Sequoia sued Changpeng Zhao for allegedly breaching an exclusivity agreement during negotiations of an investment deal. The deal was for an $80 mln, 11 percent stake in Binance which broke down last year.

Article Produced By
Ana Alexandre

Total change in her career took Anastasia into the world of analytics and business information as a researcher and translator in 2010. Some time later she got into FinTech, a dynamically developing segment at the intersection of the financial services and technology. Ana joined Cointelegraph in September 2017.

https://cointelegraph.com/news/binance-ceo-calls-icos-necessary-and-100-times-easier-than-traditional-venture-capital

Thomas Prendergast

Airdrops: Key Themes and Design Considerations

Airdrops: Key Themes and Design Considerations

A Tool for Network Adoption and Governance

If you’ve ever opened your crypto wallet and found tokens

that you didn’t knowingly purchase or accept, you’ve probably been the recipient of an airdrop — an event where free tokens or crypto assets are distributed to a group of prospective users. Why would the leaders of a project choose to distribute tokens for free? The thinking is generally that it is a tool for seeding network adoption — by giving people tokens for your protocol, it’s more likely that they will both learn about your protocol and participate in the network. Another reason is to achieve greater initial decentralization of token holders by making sure they don’t just start in the hands of the project team and folks who participated in a token sale.

While airdrops may seem on the surface to be a simple marketing tactic to bost awareness of a new cryptocurrency, they’re actually a complex tool with the potential to fuel more than just brand recognition. Looking ahead, we’ll likely see airdrops go through multiple evolutions as users play around with different elements and uses for them. There is a vast design space around airdrops, hard forks, and other methods of token distribution, which have only just begun to be explored.

To try to get our heads around this topic, in December, IDEO CoLab and CoinList hosted 12 practitioners in the crypto asset field — including founders, engineers, designers, and investors — to discuss airdrops. What follows is a synthesis of some of the themes and design provocations surfaced in the discussion.

Key Themes

1. Airdrops as a way to bootstrap new networks and communities

Airdrops can enable easier and faster bootstrapping of new protocols and communities. Airdrops to large communities of existing token holders (e.g., ETH) can provide wide distribution and a new model for marketing to and acquiring users. Airdrops may also help narrow the gap between the distribution and usage of tokens, as compared to a token sale.

Questions:

  • How do you airdrop “fairly” and equitably, especially when it is easy to game if you know how the distribution will be done in advance?
  • How do you know who to airdrop to, and how much to airdrop to them?
  • How do you airdrop to future users of the platform, not just investors or speculators?

2. Potential to sidestep regulation

There is an assumption that giving away tokens BEFORE a market price has been established for them may enable a project to avoid many regulatory requirements of token sales. It is unclear whether this is actually the case, given precedents set by the SEC related to stock “giveaways” (see 1999 Wilmer Hale analysis), yet it is a frequently cited reason for pursuing airdrops as a distribution mechanism. [Update: some teams like Harbor and TokenSoft are rolling out products that explicitly take the stance that some or all airdrops will not be exempt from regulatory requirements.]

 

Questions:

  • How should issuers legally and financially account for airdrops? As a marketing expense? As a donation? Something else?
  • How might regulatory agencies (e.g., SEC, OFAC) view and respond to airdrops, especially as they increase in frequency.

3. Airdrops as a marketing interface and onboarding experience

For many airdrop recipients, receiving tokens may be their first exposure to that project. Currently, airdrops are done without any direct way for users to learn more about the project other than searching Google or Etherscan for the token’s name. This is a poor onboarding experience and one which has much room for improvement in terms of design.

Questions:

  • How do you communicate with the recipients of airdrops? Could airdrop transactions include an onboarding message and link to learn more in the Input Data field?
  • How should an airdrop’s onboarding experience be designed to reduce friction and optimize adoption and usage?
  • How might airdrops reimagine marketing and advertising?

4. Improve effectiveness of airdrops via better targeting

Airdrops to date have targeted all holders of an existing cryptocurrency (either BTC or ETH), but it may be more effective to target a subset of addresses based on their possession or use of other tokens. For example, when launching a token for machine learning experts, it might be more effective to target NMR holders, or more specifically those who have actively staked tokens in a Numerai competition. While the ethics are murky, targeting addresses that frequently interact with various gambling platforms may be a good way to seed adoption for a project like FunFair.

Questions:

  • How do you ascertain the ‘identities’ or ‘profiles’ of address holders to make better decisions on which users to airdrop tokens to?
  • What analyses can be performed to make better inferences for the purposes of targeting?

5. Incentives post-airdrop to use utility (or attach airdrop to usage)

Instead of giving out tokens and hoping recipients will engage, there could also be an incentive to use the tokens to earn the allocation (and/or a larger one). There was a lot of interest in this idea, which essentially amounts to an initial airdrop targeting a broad population with small amounts of a token, followed by a targeted airdrop with more tokens to those who actively engage with the platform after the initial airdrop. One framing of this is to think of the initial tokens as coupons, which could be “redeemed” for more value after a desired action is taken.

Questions:

  • How do you create airdrops incentives and/or contingencies based on user actions?
  • What is the range of post-airdrop incentive models that will exist?

6. Unintended consequences (e.g., tax liability) of airdrops

Airdropping tokens may create unwanted tax and legal liabilities for recipients (and issuers). There may be more unintended consequences, as airdrops are delivered to large exchanges, custodians, and margin traders. Modeling for how different actors in the network will respond as airdrops become more prevalent will be important to an airdrop’s design and its ability to deliver on its intent.

Questions:

  • What is the cost basis and tax liability of an airdrop to its recipient? What if that recipient is an exchange, custodian, or margin trader?
  • Will people value or feel differently about tokens that they get for free?

7. New airdrop models

As airdropping becomes more common, new models will emerge for different strategies. For example, Stellar has done multiple airdrops to bitcoin holders which required proactive proof of ownership, while OmiseGo did a passive airdrop to Ethereum addresses over a minimum threshold.

Experimental models surfaced:

  • Hard spoons: Copying the balance/UTXO set from an existing blockchain network and using it as the basis for token distribution for a new protocol. Basically, you’re copying the economic distribution of tokens on one network and using that as the starting point for a completely separate protocol that is quite distinct from a technical standpoint.
  • Continuous distribution models with “central bank” and monetary policy: Models where tokens are not entirely sold/allocated up front, but rather made available over time through an issuance scheme that is laid out in advance but not necessarily governed through a process like proof of work or proof of stake.
  • Contingent airdrops: In which receiving tokens is dependent upon the user taking a desired action. See #5 above.

8. Airdrops for inter-protocol governance

Airdrops could be an effective tool for dealing with governance decisions that affect holders of multiple tokens. The simplest version is doing a protocol merger/acquisition, whereby holders of tokens for one protocol are granted tokens on another protocol as a way of combining the communities. This can be done via agreement of project leads and respective stakeholders of each project, but could also be done in a fashion akin to a hostile takeover, where incentives are given by one project for the holders of another project’s tokens to burn their tokens or sabotage the target protocol.

See Andy Bromberg’s “What The First Token Hostile Takeover Could Look Like” for more details. Also discussed was the possibility of building “poison pill” terms into smart contracts to proactively counter such attacks.

Questions:

  • How might airdrops lead to greater collaboration? Competition?
  • For what other corporate strategy and/or finance actions could airdrops be used?

Closing

While the initial conversation took place under Chatham House Rule, the following people consented to being recognized in this piece for their participation in the conversation: Andy Bromberg, Arianna Simpson, Dan Elitzer, Gavin McDermott, Ian Lee, Jay Freeman, Joe Gerber, Joey Krug, Joseph Poon, Richard Craib, and Tara Tan. No assumption should be made about any individual’s agreement or disagreement with any of the observations above.

Finally, given the pace at which everything in this industry moves, obviously there have been further developments since the initial conversation in December. One is airdrops targeting folks who may not already be crypto users, such as the experiments Numerai is doing to target data scientists on Kaggle and university students; Earn.com rolled out a product allowing airdrops to be offered to over 100,000 users; and Merkle airdrops are an interesting proposal to enable a simple claim process while reducing blockchain bloat.

While it’s clear that airdrops are a powerful tool for network adoption and governance, we’ve only just begun to scratch the surface with how they can be most effectively deployed. Let’s keep experimenting!

Article Produced By
Dan Elitzer

https://medium.com/ideo-colab/airdrops-key-themes-and-design-considerations-efadc8d5d471

Thomas Prendergast

46% of ICOs Launched Without a Business Plan

46% of ICOs Launched Without a Business Plan

ICO market research report for Q1 2018 reveals some interesting statistics.

Market research on the initial coin offering

market in the first quarter of 2018 reveals that institutional investors are playing an increasing large part in funding blockchain projects despite many of them having no development before they are launched.The research was conducted by ICO Rating, an agency which (you guessed it) rates ICOs. According to its official website, its analysis team of more than 50 experts “specialize[s] narrowly in evaluating companies in the fields of blockchain, cryptocurrencies and ICOs/ITOs.” It has offices, in Amsterdam, New York, Singapore and St. Petersburg.

Findings

The report says that $3.3 billion dollars has been raised so far this year over 412 projects. This figure only counts money raised from completed ICOs (as opposed to pre-sales and unsuccessful/ongoing projects) and excludes the now-discontinued ICO of Telegram which was worth $1.7 billion alone. If these are counted the figure stands at over $6.3 billion.

The vast majority of ICO money in 2017 was the result of only a handful of projects; according to this research this trend continues this year, although to a lesser extent. It says that only half of completed projects in 2018 raised more than $100,000, while over $1 billion was raised by only 20 projects.

According to the report, only 9 percent of ICOs came from pre-existing businesses, while 46.6 percent of these fundraising projects amazingly “had no development before their ICO campaign[s]” – meaning that they raised their money on the strength of an idea only. ICO Rating CEO Sasha Kamshilov said: “Having a traditional business does not always rule out their use of blockchain with their products, however this can sometimes create some discord amongst the perceptions of entrepreneurs.”

Maturing industry?

One sign that the industry could be maturing is that the average time taken to raise the required funds has doubled – now it is two months. There were however projects which raised all of their money in one day; in the past some have been completed in minutes. 65 percent of tokens sold were for their respective company’s product/service (utility or hybrid tokens); only 3.8 percent were for cryptocurrencies. Perhaps this is for the best; according to Investing.com, there are currently 1,685 cryptocurrencies available for purchase in the market. Of fiat currencies there are 180.

Institutionalised

The report notes that “funding during public rounds has started to noticeably lag behind the infusion of institutional capital.” It adds: “Funds are ready to invest in ICOs but they are often deterred by teams’ negligence regarding organization of KYC and AML. These procedures need to be in place, and organized to a high standard, to reduce legal risks.” 25 percent of 2018’s ICOs were not legally registered, which sounds bad until you compare the equivalent figure for the previous year – 76 percent.

The report notes the increasing importance of cryptocurrency investment funds, which now hold $27.8 billion between 119 entities. However, a full 40 percent of these have not published the identity of their CEOs and 9 have already been closed down. The most popular industry by far for ICO projects is, perhaps unsurprisingly, financial services. ICOs related to this sector raised the most money too. The post-ICO value of tokens is fairly dire – median return on investment is 49.32 percent, a significant drop from the previous quarter. Of tokens traded on an exchange, only 17 percent traded above price at sale.

Geography

The country with the most registered ICOs was the US with 59, followed by Singapore with 34 and then the UK with 26. This does not strictly correlate with the amounts raised; the US ($583.9 million) and Singapore ($468.1 million) remain in the top two but the UK ($99.7 million) slides right down behind Switzerland (14 projects, $268.2 million), China (9 projects, $202.1 million), and Estonia (16 prjects, $122.6).

Interestingly two British territories raised more money than their motherland: the British Virgin Islands (5 projects, $158.5 million) and Gibraltar (6 projects, $133.7 million). Another notable point is that while Russia was home to only 13 projects, Russian nationals headed 45 of them – making Russians the busiest nationality ICO-wise, only they don’t do it at home. Overall, by far the most money was raised in Europe (46.6 percent).

This article is Shared by

Simon Golstein | News ( CryptoCurrency )
https://www.financemagnates.com/cryptocurrency/news/46-icos-launched-without-business-plan/

Thomas Prendergast

What’s a Cryptocurrency Airdrop? A Beginner’s Guide

What’s a Cryptocurrency Airdrop?
A Beginner’s Guide

What’s an Airdrop?

Have you ever noticed an unexpected increase in your cryptocurrency wallet and didn’t know where the free coins came from? That, my friend, is most likely the result of an airdrop. Hoorah for free money! Airdrops can be delivered in a variety of ways, including forks (e.g. Bitcoin Cash, Bitcoin Diamond), ICO purchases (e.g.Raiden Network), and freebies (e.g. Binance gifting customers with 500 free TRX). Sometimes an airdrop will occur if a team behind the blockchain project decides to give away “free” tokens to the cryptocurrency community.

One of the most well-known examples of an airdrop is when a hard fork of Bitcoin, Bitcoin Cash, gave current Bitcoin holders an equivalent amount of Bitcoin Cash. At the time of the airdrop, if you were holding 0.4 Bitcoin, you were one of the many lucky receivers of 0.4 Bitcoin Cash. With Bitcoin Cash currently valued at $2,469.36 USD, that sounds like a pretty sweet deal!

Why do Airdrops Occur?

However, a big question still remains. Why does this happen, and why would a team decide to give away valuable tokens? Think about it this way. When you’re walking down the aisle of your favorite grocery store and employees are offering you samples of food to try, you may take a quick peek to analyze what the food is to decide if you want to try it. You take a bite, and it sure is delicious. The employee offering you the free sample then says “if you like it, you can find it in aisle 5 on the left-hand side”. From that single nibble, you may just go and buy the product.

In marketing, awareness is often one of the initial steps in a buyer’s journey. As with the grocery store example, psychology plays a crucial role in the aspects of an airdrop, as a buyer is much more likely to purchase a product they are familiar with than a product they know nothing about. Therefore, those in charge of distributing the tokens see an airdrop as a key opportunity to give you a taste of their tokens. Compared to alternate forms of costly advertising (such as Facebook Ads), airdrops are often a more effective approach to showcasing coins.

How Can I Inform Myself About an Upcoming Airdrop?

Many sites and online groups are dedicated to informing users of upcoming, past, and active airdrops. Icodrops and Airdropalert, for example, show a list of upcoming airdrops. They also advise you on how many days are left before they take place and what currency you need to hold at the time of each one to receive the coins. Another way to inform yourself of an airdrop is to simply keep up to date with the various social media accounts of each project.

That being said, often times, airdrops are surprises (unless you work with the project’s team). In other circumstances, an airdrop will be announced ahead of time and will have a different set of rules for receiving the tokens. The rules designated to an airdrop are decided on by the project’s team. This explains the differences in airdrop strategies. As of now, there are no standard implementation rules on how airdrops need to be designed. We may see official regulation on how they can occur if the government steps in.

A token airdrop currently underway is one from the ShipChain project. Their strategy is a bit more complicated than just holding a certain currency in your wallet and receiving free tokens. According to their website, “eligible” airdrop receivers will get the tokens in their respective wallets around March, as long as they follow these guidelines:

  1. Be an “active member of our Telegram group. An ‘active member’ means anyone that is a member of our Telegram community before the airdrop signup process is complete, which is two weeks from the Jan 15th start date.”
  2. “Pass KYC/AML (Know Your Customer/Anti-Money Laundering). This is a simple form we will have you fill out, it will be emailed to you within 1-3 weeks of completing this registration.”
  3. “Have a valid ERC20 non-exchange wallet.”

What Wallets Do I Need?

Usually, airdrops occur on the Ethereum or Bitcoin blockchain and all you need is an account on an exchange. However, those in charge of the airdrop will sometimes state a specific wallet that’s needed such as an “ERC20 non-exchange wallet”. If you’re new to cryptocurrency, you may not know what this exactly means and that’s ok, we’re here to help.

What ShipChain means by a non-exchange wallet is simply a wallet that isn’t located on exchange sites such Binance or Coinbase. Reputable non-exchange wallets include Exodus and Jaxx. For a detailed list of wallets, feel free to visit our Bitcoin Wallet guide. The article also includes ways to safely store your tokens and the advantages/disadvantages of using different types of wallets.

An ERC-20 wallet simply means any wallet that supports the Ethereum blockchain system. Some tokens follow Bitcoin protocol, some follow Ethereum, etc. Therefore, it’s important to have a wallet that allows you to store ERC-20 tokens if that’s what the airdrop guidelines call for. MyEtherWallet (MEW) is a popular ERC-20 wallet.

Final Recommendations

Most importantly, make sure you are visiting the official site of the project when researching airdrops. A good way to filter out scam sites is to visit the official social media pages and find a post which links you back to their website.  As stated before, the cryptocurrency market is currently unregulated and the potential for fraud and coin theft is high. Reputable blockchain projects will not ask you for private wallet information beyond your wallet’s public address. Never give out your private keys to ICOs who claim to “need it” for your airdrop to be delivered. Identity theft and hacking attempts are prevalent in the cryptocurrency community, and you do not want to be a victim when proper measures can be taken.

Presented By
Erin Gorsline

 
Erin is a Brooklyn based cryptocurrency enthusiast & freelance writer. Nomad at heart, you can often find her at the airport heading to her next adventure.

Thomas Prendergast

Colorado Cracks Down On Two Companies For Illegal ICO Promotion

Colorado Cracks Down On Two Companies For Illegal ICO Promotion

The Colorado Department of Regulatory Agencies (DORA)

announced its investigation of two companies for promoting unlawful Initial Coin Offerings (ICOs) to Colorado residents, the Denver Post reported May 3. The Colorado Securities Commissioner said that California-based Linda Healthcare Corp. and Washington-based Broad Investments LLC could potentially be violating Colorado securities law by promoting ICOs.

DORA discovered that Linda Healthcare is promoting a “LindaHealthCoin” token on its website, which ostensibly can be used to purchase Linda Healthcare’s insurance. According to the website, the token can buy telemedical coverage “through an artificial intelligence chat service that creates medical solutions through use of blockchain technology.”

According to DORA, Linda Healthcare offers no warnings that ICOs constitute a security in the state of Colorado. “The Linda Health Insurance network is, to date, not in operation,” officials reported. A March 19 tweet from the firm directs potential customers to consult its white paper.

As Denver Post reports, Broad Investments firm is allegedly promoting cryptocurrency using a token that is described on its website as “an equity coin that represents shares of the company, like company stocks.” The token would ostensibly give holders a right to a share in returns from Broad Investments’ strategy, which builds stock portfolios with an algorithm. Officials say that the “math-oriented value system” on the website was not operational.

DORA representatives reported that both companies did not provide any information on the risks of investing in crypto or ICOs on their websites. Colorado Securities Commissioner Gerald Rome commented that investments in ICO tokens should be done carefully: “Investment opportunities being sold through ICOs over the internet need to be approached with the same level of caution as for any highly risky investment venture.”

The firms must now prove why the should not be sanctioned under the Colorado Securities Act, according to which the firms will receive cease and desist orders. Earlier in March, the Massachusetts Securities ‎Division issued consent orders requiring the permanent suspension of five firms’ unregistered ICO sales, citing that the companies were selling unregistered securities.

Article Presented By
Helen Partz

Helen is passionate about learning languages, cultures and the Internet. She has years of experience working at international online advertising projects. Growing interested in Bitcoin and cryptocurrencies in late 2017, she joined Cointelegraph as a writer.

https://cointelegraph.com/news/colorado-cracks-down-on-two-companies-for-illegal-ico-promotion

Thomas Prendergast

South Korean Lawmakers Introduce Bill To Legalize New ICOs

South Korean Lawmakers Introduce Bill To Legalize New ICOs

A group of South Korean lawmakers

is working on a bill to legalize the launch of new initial coin offerings (ICOs) and digital currencies, local news outlet The Korea Times reported May 2. Rep. Hong Eui-rak of the ruling Democratic Party of Korea is leading the move along with 10 other legislators to back the bill and have it endorsed this year.

During his speech at a forum devoted to ICOs and blockchain technology at the National Assembly on Wednesday, Hong said that "the bill is aimed at legalizing ICOs under the government's supervision." He also said that the bill was based on collaborative research conducted by his office and the Korea International Trade Association (KITA).

Hong added:

"The primary goal (of the legislation) is helping remove uncertainties facing blockchain-related businesses."

According to the bill, ICOs initiated by public organizations and research centers will be subject to strict supervision by the Financial Services Commission and the Ministry of Science and ICT.

Chung Sye-kyun, a speaker from the National Assembly, underlined the role of lawmakers to eliminate political uncertainties surrounding digital currencies and

blockchain technology:

"Blockchain and cryptos can be used in various public sectors for good causes. Given their potential, we need to work to help reduce political uncertainties they face."

The move is the first parliamentary challenge to the government's ban on the opening of new ICOs, which was introduced late last year to fight speculative investments in cryptocurrencies. In March, 2018 rumors surfaced that certain entities within the South Korean government were considering to release the ban on ICOs, so long as new offerings adhered to strict government standards.

Written By
Ana Alexandre

Total change in her career took Anastasia into the world of analytics and business information as a researcher and translator in 2010. Some time later she got into FinTech, a dynamically developing segment at the intersection of the financial services and technology. Ana joined Cointelegraph in September 2017.

https://cointelegraph.com/news/south-korean-lawmakers-introduce-bill-to-legalize-new-icos

Thomas Prendergast

Australia’s Securities Watchdog Moves to Halt ‘Deceptive’ ICOs

Australia's Securities Watchdog Moves to Halt 'Deceptive' ICOs

The Australian Securities and Investments Commission (ASIC)

said Tuesday that it is taking aim at fraud in the initial coin offering (ICO) market. In a statement published May 1, the agency said that it is "issuing inquiries to ICO issuers and their advisers where we identify conduct or statements that may be misleading or deceptive." Additionally, the securities watchdog suggested that it was moving to halt unlicensed activity as well. "As a result of our inquiries, some issuers have halted their ICO or have indicated the ICO structure will be modified," ASIC disclosed, though it didn't say how many token sales have been canceled or changed in light of the agency's actions.

ASIC commissioner John Price explained:

"If you are acting with someone else's money, or selling something to someone, you have obligations. Regardless of the structure of the ICO, there is one law that will always apply: you cannot make misleading or deceptive statements about the product. This is going to be a key focus for us as this sector develops."

As CoinDesk previously reported, the move was perhaps expected. Price spoke about token sales on April 27, declaring the agency's intention to focus on overseas-based ICOs that target would-be Australian investors. "I cannot stress enough that if you are doing business here and selling something to Australians – including issuing securities or tokens to Australian consumers – our laws here can apply," Price said at the time.

In Tuesday's statement, ASIC indicated that it would be scrutinizing a popular aspect of ICO marketing – the white paper – as it looks into whether those behind such sales are in compliance with Australian law. "In one recent example, ASIC took action to protect investors where we identified fundamental concerns with the structure of an ICO, the status of the offeror and the disclosure in its white paper," the agency explained. "In addition to potentially misleading statements in the white paper, the offer was an unregulated managed investment scheme."

Written By

Stan Higgins
stan@coindesk.com

A member of CoinDesk's full-time Editorial Staff since 2014, Stan has long been at the forefront of covering emerging developments in blockchain technology. Stan has previously contributed to financial websites, and is an avid reader of poetry. Email: stan@coindesk.com. Stan does not currently hold value in any digital currencies or projects.

https://www.coindesk.com/australias-securities-watchdog-moves-halt-deceptive-icos/

Thomas Prendergast

Compliant Airdrops Are Here: CoinList to Offer Investors Free Crypto Giveaways

Compliant Airdrops Are Here: CoinList to Offer Investors Free Crypto Giveaways

Who'd have thought giving something away could be so complicated?

That's the question crypto innovators have had to come to terms with since the concept of "airdrops" – or the practice of gifting tokens in massive giveaways – has come under the scrutiny of government regulators. But with the launch of a new product Wednesday, CoinList, an initial coin offering (ICO) facilitator spun out of the renowned startup incubator AngelList, is looking to streamline the process of airdrops in a way that doesn't run afoul with the law.

Aptly named Airdrops, the product runs users through compliance checks and attestations so that a token issuer can give CoinList's users free tokens. On top of that, if the issuer is looking for users that meet certain criteria (be it a profession or location), they can verify that users actually fit those backgrounds. In this way, CoinList CEO Andy Bromberg believes he has found a way to enable airdropped offerings at a time when many in the industry are looking for a compliant service. Token issuers themselves have had no shortage of issues here, with some, including video-monetization service Stream, even backing off the concept altogether because of the regulatory uncertainty.

Indeed, the SEC hasn't taken a formal stance on how it views crypto tokens delivered through ICO, airdrops or other forms of sales and giveaways, but it's clear regulators are currently investigating that question. Still, Bromberg is confident in his assembled solutions, and in interview, he hinted at dialogue with regulators that would attest to the viability of the service. "In our typical compliance first mindset, we sat down and said: Is there a way to pull this off without violating securities laws? And what we came to is the compliant Airdrops product," Bromberg told CoinDesk.

He continued:

"I can't comment on individual discussions with the SEC. What I can say is we are in frequrent communication with them and — based on our understanding of securities law — we are very comfortable with this."

Not only does the startup believe it has a solution for working under existing securities law, but it's also opening up its existing user base of past investors to new token issuers. Once users have gone through the company's compliance flow, they will be verified to receive airdrops, and CoinList will take a nominal fee from users (less than $1 per airdrop) to accept new tokens. To date, according to a CoinList spokesperson, it has facilitated more than $400 million worth of token sales through its platform, representing what could be a vast pool of people interested in investing and taking part in future crypto tokens.

Compliance as a service

While that pool of potential investors will likely be attractive for token issuers, Coinlist's product is opt-in – a feature added to reduce spam and mitigate the security threats that have become a common annoyance from crypto enthusiasts involved in such offerings. Also, CoinList says it's only willing to work with token issuers that are focused on complying with the law. And that's partly because CoinList will be promoting these projects for issuers.

Still, CoinList's Airdrops product seems to be set up whereby all the compliance effort is offloaded from the issuer, which many issuers will like since many are not securities law experts. CoinList's product allows for airdrops that might fall under Regulation S and Regulation D and will also collaborate with AngelList spin-off Republic, which has a license to sell securities under limited conditions to non-accredited investors using Regulation CF.

The company is also doing a country-by-country analysis to determine what sorts of checks issuers will need to do in order to airdrop to users around the world. Depending not only on the goals of the issuer and who they want to give to, different levels of know your customer (KYC) and anti-money laundering (AML) requirements will be needed, and whether issuers can to both accredited and unaccredited investors or one or the other.

And all of this has already proven enticing to token issuers. Bromberg told CoinDesk the company is in negotiations with more than one issuer to use its Airdrops product but declined to disclose which ones. While CoinList has so far been focused on fundraising, Bromberg said that potential issuers will not have to have a token sale on the platform in order to use the new product. "We're interested in exploring this model where in some cases … funding might be separate from distribution," Bromberg said.

The right recipients

Still, different companies might have very different goals for an airdrop, and Bromberg gave two examples of use cases he believes could work well. For example, he said a company with a token it believes regulators will recognize as a utility token, something used primarily to access a certain service, can use CoinList to get it in the hands of people who are likely to be the most interested.

This issuer might target software developers, and in this case, CoinList would enable them to authorize the airdrop to check a users Github API and distribute to developers with a certain commitment frequency. Getting the tokens in the hands of people who will ultimately use the token as intended "will help that network get to a place where that token is no longer a security," Bromberg said. Still, there could also be companies that want to issue securities, Bromberg said: "A company could tokenize some of their equity and give that equity, give those tokens, to early users on the product."

As such, CoinList will also offer a wide array of ways to authenticate users as meeting certain objectives, be it a certain audience on Twitter, a certain location in the world or a certain occupation. It can use APIs off other websites to verify these target goals to insure that an airdrop recipient meets them. Because it is running KYC/AML checks on all of them, it also verifies that each user receives a token allocation only once. "It prevents gaming the system," Bromberg said. It's an approach designed for an excess of caution, but one that's also ready to adapt.

"Whether or not these things are securities, we are treating them like securities to be as safe as possible," Bromberg said. To that end, some startups have been meeting with the SEC to ask for what's called a no action letter, a document that says regulators believe a given company has not violated securities law. If something like that comes to pass, CoinList is confident enough that the platform is ready for that, too.

Bromberg concluded:

"We'd be open to airdropping without the compliance layer."

Written By
Brady Dale

Brady Dale is a reporter who has previously written for Fortune, Technical.ly Brooklyn, Next City and Motherboard, among others. He grew up in Kansas and lives in Brooklyn. As an early user of the crypto-powered social network Steemit, Dale earned Steem Power by participating on the site.
https://www.coindesk.com/coinlist-compliant-airdrop-token-giveaways/

 

Thomas Prendergast

US: SEC Official Says ICO Regulation Should Be ‘Balanced’, Congressman Suggests Ban

US: SEC Official Says ICO Regulation Should Be ‘Balanced’, Congressman Suggests Ban

In a hearing at the US House of Representatives

on Thursday, April 26, a regulator from the US Securities and Exchange Commission (SEC) and House Financial Services Committee members hotly disagreed over whether a “balanced approach” could be taken in regulating Initial Coin Offerings (ICOs). At the start of the hearing, entitled “Oversight of the SEC’s Division of Corporation Finance”, William Hinman, the director of the SEC’s Division of Corporation Finance, said that the area of digital assets and

ICOs “continues to evolve”:

“We are striving for a balanced approach, and one that ensures capital formation while maintaining a strong focus on investor protection.”

One purpose of the hearing was to discuss possible reasons for the declining number of Initial Public Offerings (IPO) in the country. Committee member Bill Huizenga asked Hinman if ICOs could be a solution to this decline, and whether all ICOs must be regulated. In response, Hinman said that “in theory, there is a time when a coin may achieve a decentralized utility in the marketplace, or […] there may be coins where that lack of a central actor may make it difficult to regulate.”

Hinman followed previous comments from SEC chairman Jay Clayton that most ICOs should  be considered securities. According to Hinman, the SEC would be consulting with entities releasing tokens to verify that the offerings were either regulated or not qualified as securities. Committee member Brad Sherman (D-CA) disagreed with the idea that ICOs could replace IPOs, as an IPO “provides jobs in the real economy,” and

ICOs do “the opposite”:

“It takes money out of the real economy, it takes people willing to invest and risk, and says ‘don’t use that ability to risk, don’t use those animal spirits to help create a job for a person who needs one, let alone build a factory for thousands, sit there and trade back and forth in the ICO.’”

Sherman then asked why ICOs haven’t been “stopped,” noting that the “balance” mentioned by Hinman will negatively affect the economy:

“When you strike a balance between those who are trying to create a new currency to facilitate drugs, tax evasion, to deprive the Fed of its ability to market our securities and return 100 bln dollars or so to the US treasury, all the balances are for total investor protection, which could be achieved by totally banning.”

Sherman said of the decentralized nature of ICOs:

“Charlatans and scammers have always favored decentralized new enterprises.”

Committee member Tom Emmer (R-MN) took a different approach, saying that there “is a lot of of ignorance about how special this area is”,

he continued:

“The typical attitude too that I get from so many elected officials is that have no idea what they are talking about […] everyone who is participating in [an area they don’t know] is either bad or dishonest, and an official must rush in and help people .”

The SEC and the Commodity Futures Trading Commission (CFTC) held a cryptocurrency hearing in February of this year. They reached the conclusion that ICOs need the most amount of oversight, digital ledger technologies (DLT) like Blockchain the least, with virtual currencies like Bitcoin (BTC) falling somewhere in between.

Written By
Molly Jane Zuckerman
https://cointelegraph.com/news/us-sec-official-says-ico-regulation-should-be-balanced-congressman-suggests-ban

Molly Jane is a Russian Literature major from California with a background in writing. She joins Cointelegraph after working as a freelance journalist and blogger.

Thomas Prendergast