Initial coin offerings (ICOs) may have been called a bubble as well as attracted regulatory scrutiny, yet a crowdfunding site is usually hoping to improve things for legitimate start-ups.
ICOs have become a favorite way for cryptocurrency start-ups to raise money by issuing their own digital tokens in exchange for a virtual currency like ether or bitcoin.
Investors don’t get a stake within the company, yet the tokens they receive can be traded or used on a service provided by the platform.
yet recently there have been signs of cooling of brand new ICOs amid a regulatory push back as well as concerns over the quality of some of the offerings.
Slava Rubin, the founder as well as chief business officer of crowdfunding site Indiegogo told CNBC in which despite the setbacks, blockchain as well as cryptocurrencies have become a key source of fundraising. The key was to improve transparency, he said.
“There’s a lot of people trying to figure out how to cut the edges, how to deal with ambiguity. We want to make sure we are bringing a platform in which is usually very white hat,” said Rubin.
Last week, Indiegogo as well as its Financial Industry Regulatory Authority registered broker-dealer partner MicroVentures launched an ICO service in which will help entrepreneurs stay on the right side of the U.S. Securities as well as Exchange Commission, said Rubin.
The service will ensure in which “if you are an entrepreneur you are definitely not going to jail, as well as you are definitely doing in which right as well as if you are an investor you know in which these companies have been vetted as well as This particular is usually an offering in which is usually completely legitimate,” he added.
Indiegogo’s first ICO is usually a fan-controlled football league in which has already raised $3 million out of the $5 million in which is usually seeking since the pre-sale was launched seven days ago, said Rubin.
He added Indiegogo has already received hundreds of applications for future ICOs.
Cryptocurrencies have exploded in popularity in recent years, thanks to innovation in blockchain, the distributed ledger technology underpinning those virtual tokens such as bitcoin.
in which has led to a red-hot fundraising trend where start-ups are pulling in millions of dollars in capital by issuing virtual coins to investors in exchange for money.
As digital currencies are pseudonymous, decentralized as well as encrypted, in which is usually harder to track each of the transactions made, as well as the individuals behind them. in which, many worry, leaves plenty of room for people to launder money or finance terrorism activities as well as engage in some other fraudulent behaviors.
CNBC’s Saheli Roy Choudhury contributed to This particular story.