Innovators in the initial coin offering (ICO) sector appear to be stepping up efforts to target an increasingly interested institutional market.
While professional investors and money managers have historically struggled to gain exposure to the Wild West of token sales and ICOs, work is now underway to create new offerings geared toward not only this audience, but the evolving regulations that both buyers and sellers must abide by.
In short, a strategy pioneered with the launch of the first token designed specifically as a security, VC firm Blockchain Capital’s pioneering BCAP token, is showing signs of further adoption.
Using the same investment bank, California-based Argon Group, Protos Cryptocurrency Asset Management announced a plan last week to launch an ICO via a Regulation D placement that would see it collecting funds for a cryptocurrency hedge fund.
And industry analysts see a simple reason why – the increasing specter of regulatory action runs the risk of muting the outsized returns that have heightened the market’s exposure.
Brad Chun, CEO of blockchain startup Mooti Digital Identity, sees this as a smart and necessary way to appeal to investors, given regulatory risk. Not only has the SEC indicated that issuers could face liability for disseminating tokens deemed securities, but regulators in China have gone so far as to demand that businesses selling them halt forthwith and refund customers.