From whitepapers to pitch decks to tokenomics and exchange listings: the process of minting your own cryptocurrency is not particularly well understood. The industry has changed beyond recognition since the early days of 2017 and the market is home to some big players – for example, Telegram, which raised $1bn during its private sales without even having to progress to a public ICO.
Let us give you a flavour of how world class ICOs happen here on the Isle of Man.
There are five key stages you need to be prepared for and aware of to give your ICO a decent chance at success.
If your ICO use case is merely to provide a large-scale turnaround in funding by issuing tokens with no realistic future prospect of successfully implementing any underlying technology, or providing any genuine value to token holders, it will not find a home on the Island.
You should know the difference and make the case for whether your issue will be for security tokens or utility tokens.
Security tokens are similar to (and in some cases i.e., the United States, defined as) securities. ICOs based on security tokens tend to cause concern amongst regulators because the purposes for which the money is raised can easily be subverted, opening the door for fraud, money laundering and terrorist financing.
Utility tokens are used in a network for a particular purpose. Rather than market perception of value which relies on herd behaviour and is notoriously prone to spikes, the value of a utility token really depends on the adoption by users of the network it relies on. Blockchain works best here because it allows quick, efficient and irrevocable transfer of these tokens around the network. Some good examples are Filecoin, and Kik.
We have a limited client list and we tend to select clients for consultancy on the basis of how strong the underlying use case is for their ICO. We need to obtain an understanding of:
ICOs are the first and biggest disruptor to the world of raising finance. Private equity specialists have been taken by surprise by this entirely new way of raising money that the industry seems to know nothing about.
If your ICO is to succeed on the Isle of Man, you will need to demonstrate a level of existing capital in order to fund publicity/advertising, expertise, regulatory compliance. Essentially, you need the right team or “supporting cast”.
Normally, you’ll start with a white or “lite” paper setting out the nuts and bolts of what it is you are trying to achieve.
It is no longer enough to do an ICO. The low-hanging fruit is mostly no longer there, and both professional and retail investors expect more than just an immediate rise in price of any token they buy.
This is where the Isle of Man really comes into its own. Our regulation offers you two specific and key advantages over other jurisdictions: (i) clarity and (ii) certainty.
Our reputation for online regulation is rarely paralleled by any other country and the existing framework for digital currency on the island sets out a complete and thorough compliance journey.