An Initial Coin Offering (ICO) is an online crowd sale mechanism by which funds are raised. It is a relatively cheap form for businesses to raise money as it does not normally involve dilution of equity or the burden of high-interest debt that is common with venture funding.. Tokens that are issued in ICOs are normally divided into 2 types, Utility-backed tokens and Security-backed tokens. In most jurisdictions bar a few, the latter is heavily regulated or is seen to be akin to the offer of securities. Hence they do not attract the rigorous and regulated capital-raising process required by regulators, banks and venture capitalists. A testament to the popularity of this method of fund-raising can be seen in the first quarter of 2018, where ICOs have raised approximately $6.3 billion globally.
The Monetary Authority of Singapore (MAS) is one of the most active and dynamic regulatory bodies in Asia. In order to ensure the sustainability of the industry, the MAS has cracked down on ICOs and Cryptocurrency Exchanges in the past for not being registered and licensed appropriately as it was deemed that the Cryptocurrencies being dealt in were actually to be considered as securities. In addition to this, the fundamental maintenance of anonymity while transacting using cryptocurrencies has given rise to numerous Anti-Money Laundering issues. This, in turn, causes several regulators and financial institutions to shy away from them
Role of CorpServe
CorpServe is a regulatory compliance consulting firm who believe in being ahead of the curve by simplifying compliance. We are a team with diversified experience ranging from Lawyers, Chartered Accountants & Bankers. The skills from these experiences help us managing the entire lifecycle & process of an ICO.
CorpServe acts as the core advisor to your team of founders. We assimilate and draw experience from our partners to help set up the entire framework for your ICO. This includes determining the value of a token, the type of token used i.e. Utility vs Security, how the use of blockchain technology is incorporated in the business, as well as corporate & tax structuring. We will be involved as part of your project management team to help draft your whitepaper in accordance with local regulatory requirements, which may also require the involvement of our Legal partners as necessary
During the ICO, CorpServe will help you manage the AML/CFT checks on all investors onboarded in accordance to the earlier prescribed risk-based procedures. This is to mitigate the risks associated with investor onboarding as well as to ease the whitelisting process. CorpServe also can help automate this process with the implementation of our digital investor onboarding platform.
The ICO is just the first step of raising funds for an entity. CorpServe and its partners will continue to stay involved after the ICO to ensure the project becomes a success. We at CorpServe will help you maintain oversight and to be compliant always with relevant regulations and best practices in the market. This model enables you to manage your deliverables due to the market in a smooth and seamless manner.
CorpServe’s Role in Lifecycle of an ICO
Idea Generation: Like any traditional startup from the inception of the initial idea to solve a problem on the Blockchain, distributed ledger, hyper ledger and other related technologies.
Assembling core team – Internal & External: The founder(s) assembles the core team members that will drive the project, and this may comprise of CorpServe and our partners
Compliant Strategy Conceptualization: Upon the conceptualization and crystallization of the idea into a formal plan, CorpServe and its partners will help strategies this aspect. CorpServe works with the relevant stakeholders to ensure decisions made, including product characteristics, are compliant with regulations, from both a business perspective as well as from a token offering perspective. This includes compliance and best practices for KYC (Know Your Client), AML (Anti Money Laundering) as well various other relevant aspects of the ICO
White Paper: CorpServe and our partners can help you transform the conceptualized strategy into an official white paper to address the relevant issues surrounding the ICO (such as product and its technology, the token and the ICO, team, business and so on) in a clear and succinct manner. This is one of the most important documents for an ICO issuance.
Corporate / Legal / Tax / Compliance Structuring: The ICO is now structured in a compliant and effectively, a sustainable manner, a product of which CorpServe and our partners help lay the groundwork for the founder’s dream via efficient corporate, tax, legal, & compliance design.
Marketing: CorpServe is well connected in the ICO space and it is through this network that we are able to leverage off the experience of successful ICOs and replicating the same for your ICO. This may take effect through numerous channels, examples may be digital platforms, influencers, road shows, partners, and co-branding. In this light, it is also very important that the marketing plan does not breach any regulatory requirements
Digital Client On-Boarding: CorpServe provides a tech-savvy Digital Client On-Boarding Solution for ICOs. The platform incorporates biometric facial recognition with Identification scanning, supplemented with AML/CFT checks via world class databases such as LexisNexis. This solution can automatically approve compliant investors under 2 minutes
Token Sale (optional pre-sale): Run the actual crowd-sale or a pre-sale (public or private) to collect “seed” money for development.
Ongoing Compliance: Upon the completion of an ICO, the compliance obligations of the issuer and the business behind it start to increase. CorpServe can help design, implement and monitor the risk management and compliance framework for the business on which the ICO is built on, which may include matters such as token allocation and efficient use of funds as per the whitepaper strategy
Key Partners of an ICO
It is to this effect that CorpServe can help you manage your numerous risks and regulatory exposures in an efficient manner, for you to be able to focus on executing successful ICO’s and operational aspects of the business while we act as an extension of your team.