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ICOs are on the rise and so are SEC Cyber Unit enforcement initiatives. Last week, I went to the Crowdfunder Educational Series “Introduction to Launching an ICO” at Expert DOJO in Santa Monica, California and heard from some subject matter experts. Following are some of the pearls of wisdom that I garnered from the series.
“It takes a village to launch an ICO” – Joanne Park, CCO of Crowdfunder.
An issuer planning to launch an ICO must have an expert legal team living in this “village.” According to the presenters, there are three phases of launching an ICO:
“Investors care about liquidity” – Miko Matsumura, founder of Evercoin.
People investing in ICOs believe their investment will eventually result in economic gain. A cryptocurrency exchange like Evercoin provides liquidity and being listed on an exchange lends the issuer instant credibility. Miko said legal compliance is like safety equipment and “you don’t have to run faster than the tiger, you just have to run faster than the guy next to you!”
“Big law firms don’t necessarily have the credibility in this space because ICOs have not been around that long” Mark Schwartz, CTO of The Crypto Company.
Mark explained that potential ICO investors will give considerable weight to the people behind an ICO, particularly advisors and the legal team. It is imperative to be comfortable with your legal team and you may get more bang for your buck by working with a smaller law firm.