Scammers have used scam projects to give the term ICO a nasty aftertaste. While investors fear not to see their money again, honest ICO owners are fighting not to be put in the scam drawer. The ICO hype seems clearly over. But a UK-based crypto firm believes that ICOs can still be an excellent source of revenue – if they meet certain ethical standards.
Only eight percent of all ICOs are successful and listed on crypto exchanges. Just recently, Civil surprised when the Blockchain project had to announce the failure of its crowdfunding campaign – it could not reach the softcap. Accordingly, the company had to pay back the investors their money. As this “money back guarantee in case of failure” is currently the only hedge for investors, ICOs are anything but safe.
ICOs in the new light
How Crypto briefing on October 19th reported that the British holding company investX ICOs now wants to give a different connotation and set with its own offer new ethical standards. The INX token is intended to allow the purchase of dividend shares of private companies. The main focus here is on opening up SME investments to a broader range of investors, including private investors. The British Financial Conduct Authority (FCA) has already given its approval.
The planned public sale for their utility token INX should follow strict principles. With the creation of a reserve fund and a sustainable token supply, the company wants to reduce the risk for investors. As part of this, David Atkinson, director of Holochain (HOT), advised Investx on the development of the ethical ICO.
What is an ethical ICO?
Atkinson strongly believes that public sales will restore confidence in the marketplace. His own company Holochain promises a “more humane Internet” on the website, the ICO was developed ethically correct. Aware of these promises, Peter Edgar, Investx CEO, asked Atkinson for help in developing the INX ICO.
Atkinson says an ICO is ethical if the token sold has an actual benefit based on a real need. To do this, the white paper must contain the future purpose of the token and explain exactly how it would benefit the holders. He explains:
“It’s up to the projects to clearly present their product and show that there is a demand for what they build. For example, with Investx, they need to be able to show that there are private buyers who want to buy dividend stocks in private companies using Blockchain. “
Because the INX tokens are useful in facilitating the purchase of stocks, Atkinson recognizes them as ethical. The special benefit is the saving of legal costs. In addition, the time delays normally associated with the purchase of dividend shares are being circumvented.
A bad image is known to be very difficult to strip. However, the approach that Holochain and Investx pursue with their ethical ICOs promises to have the potential in the long run to enhance the reputation of this crypto-crowdfunding strategy. As before, the motto is not to blindly invest in promising projects, but to do a detailed research in advance. The criteria for ethical ICOs can be helpful.
Categories: Crypto Currency