Based on blockchain technology, Initial Coin Offerings, or ICOs, are a new way to finance projects, meaning such a project can then benefit from reciprocal investment opportunities and network effects. A precise analysis is however necessary to determine their relevance according to the business model being considered..
Current trends in the banking and financial sectors have increased interest in alternative sources of funding. The use of tokens based on the blockchain technology, including Initial Coin Offerings (ICO ), have thus become quite popular for:
- companies (including start-ups and incumbent players) needing financing;
- users expecting new services on digital marketplaces; and
- investors interested in new sources of financial returns (particularly those non-correlated with traditional regulated markets).
With the above in mind, a new ecosystem has come to light these past few years based on the token economy. It is made up of issuers, token holders, and various intermediaries willing to be a part of this new way of doing business and financing.
This phenomenon shed light on certain well-known success stories but also on less fruitful experiences, emphasising the need to question whether ICO financing was appropriate for all business types. Since regulatory frameworks in the jurisdiction(s) involved may not yet be specifically suited to address this innovation, the [due] diligence required as regards ICOs must be very thorough.
How Gide 255 can assist you with ICOs
Gide 255 has developed a specific offer to advise clients on key strategic and legal issues pertaining to ICOs.
- Drawing on the multidisciplinary expertise of its team members, Gide 255 works with stakeholders in the token economy (issuers, subscribers, other intermediaries involved during and after token issue) to assess the business stakes of the operation, help them take the relevant strategic decisions and provide them with the legal safety to do so.
- Bearing in mind that regulations regarding the token economy are still changing depending on the jurisdiction(s) involved, Gide 255 assists clients when they consider existing, as well as potential future, legal constraints, to help them integrate all such regulations as a strategic tool to develop their activities.
- In a field where potentially applicable regulations are complex and may involve several jurisdictions, Gide 255 can call upon the wide range of expertise and the international network of Gide as a whole to provide its clients with a comprehensive one-stop legal service.