ICOs May Need to Follow Bank Secrecy Rules

Tokensale campaigns can face new regulatory restrictions
07 March 2018   1365

The organizers of the ICO campaigns may be required to follow the provisions of anti-money laundering and terrorist financing laws requiring reporting of any suspicious investor activity to the authorities. This is reported by Bloomberg.

In December 2017, Senator Ron Wyden appealed to the US Treasury  Financial Crimes Enforcement Network (FinCEN) with a request to report on the work done in the area of ​​establishing control over the sphere of crypto-currencies. FinCEN's answer to the senator was published this Tuesday.

In its letter, the agency explains that companies that conduct ICO, from the point of view of the law, can be considered as services for the money transfers. Thus, they can be presented with all the requirements designed to combat the financing of terrorism and money laundering in this area specified in the law on bank secrecy.

FinCEN explains that these requirements apply to all projects related to convertible virtual currencies, which are either equivalent to real currencies, or can be used to replace real currencies. Depending on the conditions of the specific ICO, such companies may be regulated by either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

In accordance with the requirements of the law, the organizers of the ICO must register with FinCEN, and then report any suspicious activity of investors to the relevant services.

Although some ICOs have already begun to register, while waiting for the introduction of new requirements, most have not yet done so. According to the law on bank secrecy, the latter can wait up to 5 years in prison.

States that have not yet developed their own legislation to regulate the digital currencies can use the FinCEN letter as a guide for decision-making in the future, requiring that the new ICOs receive a license as companies operating in the field of money transfers.

Although some consider this message as old news related to the Ministry of Finance decree issued five years ago, and welcome the establishment of legal certainty in the ICO area, others note the lack of specificity in the message of FinCEN.

Particular problems may arise in startups, operating in the US, but registered abroad. Although they do not directly fall under the requirements of FinCEN, they may also be required to report suspicious investor activity. In addition, small projects, perhaps, will not be able to conduct ICO at all because of the costs associated with the new requirements.

Algorand to Raise $60M in 4 Hour Tokensale

The project was founded by a MIT professor and a Turing Award winner Silvio Micali and is designed to solve the problems of scalability and consensus in the DLT
20 June 2019   774

The blockchain-project Algorand, aimed at creating an “borderless economy ”, announced the successful completion of the  ALGO tokensale, during which it raised over $ 60 million, CoinDesk reports.

The campaign was held on the CoinList platform and was conducted in the format of the so-called “Dutch auction”, in which the highest price is first announced, after which it gradually decreases.

Simultaneously with the completion of the tokensale, it was announced the launch of the main network of the Algorand. The platform processes 1000 transactions per second with a delay time of less than 5 seconds, which, as noted, puts it on par with such major payment networks as Visa and Mastercard.

In his work entitled The Monetary Experiment: Algorand A Thesis For Algo Currency Markets, the head of Arrington XRP Capital, Michael Arrington writes that Algorand is a project where macroeconomics meets cryptocurrencies. He also notes that Algorand, as a blockchain-resistant Proc-of-Stake algorithm, is distinguished by a combination of advanced cryptography and a smart economic model.

The Algorand project was founded by a professor at the Massachusetts Institute of Technology and a Turing Award winner Silvio Micali. The main task of Algorand is to solve the problems of scalability and consensus in the blockchain.

As noted, the exact number of buyers who participated in the auction remains unknown, but because of high demand, the campaign lasted less than four hours. In total, 25 million ALGO tokens were distributed with a starting price of $ 10 and a closing price of $ 2.40.

Representatives of the project also stated that since tokens are distributed to customers' wallets and are not available on stock exchanges, there is no need to talk about any value of Algorand market capitalization.

Algos are being dispersed to wallet right now (for successful bids).  Therefore – there are non on exchanges. [Therefore, no market capitalization is available for Algorand, though some have speculated it sits around $6 billion.] Which is still a top 10.

Algorand Team

Earlier, the project announced plans to auction 600 million ALGO tokens per year, and in the first five years it is planned to release 10 billion tokens.

Also note that over the last year, Algorand raised $ 66 million in venture capital from investors such as Union Square Ventures and Pillar Venture Capital.