Topic: Initial Crowd Offerings & the legal standing of Companies ICO's (Read 1077 times)
Tumbleweeds
* Thank you to Malevolent for ensuring this was posted in the correct section.
To begin this thread, my initial research involved 'PayProCoin', which has been developed by a UK registered company.
I'm interested to hear others views, and knowledge regarding the legal standing in an ICO in the UK and across the globe.
As an example - the facts regarding PayProCoin;
A varied clone of Bitcoin.
80Billion SHA256 coins to be mined, over decades.
80million coins pre-mined by the developing company, at an initial IPO offering price of 0.00002500Bitcoins each 1PayProCoins, offered directly on a company website.
40million offered in the IPO = 1000BTC (at time of launch exchange rate : €410,696.74)
Therefore, the company in question; must they now clearly show that they have the funds to buy the remaining 40million pre-mined PayProCoins at the price listed for sale? As they have been held back for use by the company, I am presuming that this is the case in an ICO, however, I am also seeking clarity on this issue from the FCA (http://www.fca.org.uk) as we go forwards.
My question, therefore;
Is it correct that a company offering a 50% ICO, need to be able to show funds or assets with which to solidify and hold the remaining 50% under UK financial regulations.
IN this case the ICO was for 'Coins' - however, the method of distribution was on a share basis, registered on a blockchain.
Thanks for looking in, this is just an example, it may be a grey area in legislation, and this thread will remain open for comment or correction.
Also interested to hear responses regarding other country legislation from across the world.
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