In the latest crazy twist in Fintech, Bra millionaire and Baroness, is launching a new Start Up fund based on crypto currency.
Michelle Mone and her business partner Barrowman, are about to launch an ICO - Equi. Their new coins will be part of their new fund for start ups. Why they have chosen to raise the money by issuing a new coin is a mystery to me apart from the rather too obvious media attention.
This deal is being set up in such a way that it circumnavigates the eye of the FCA. Its a very fine line they are drawing and I just wonder if this is the sort of monkey business that a Peer of the Realm should be involved in? They get around the FCA regulation because the coins are non transferable so are not considered within the FCA's remit. In fact this is probably the only reason they are even talking about using coin.
If it comes off, which seems unlikely and the FCA quite rightly bring it within their remit, one hopes that a Peer of the Realm will not find another smoosh to hide it under. After all, despite her success, it should be a one size fits all when it comes to financial regulations.
The amount of money being raised in ICOs is eye watering, honestly its incredible. If you think ECF is surprising, just look at ICO drop or one of the other sites. ICOs with limits of 20m$ or 40m$ fill up in 5 minutes.
ReplyDeleteIm guessing this is why they've spotted this opportunity.
I think many of these are offering new coin for old ie you buy into the ICO with Bitcoin Ethereum etc which is not quite the same as using £/$.
ReplyDeleteYes almost all ICOs (I think all) use Ethereum, Ethereum has a different use case to bitcoin, it allows other coins to create ICOs and smart contracts. Its not really meant to be a currency.
DeleteInteresting read, well I’m trying to do an ICO that only accepts ‘Fiat currency’ to buy the ‘coins’ or utility tokens as they are known. Tough market to crack as the banks are making it incredibly difficult.. Although it’s great buying coins using Bitcoin/Ethereum etc, to raise funds for a business using this method alone I feel is risky as it’s far too volatile to seriously scope or run a real business with. However concept of an ICO is incredibly empowering for an entrepreneur and I actually love it! The reality is, if you’re doing it properly, setting up the legals, tax advice, various company structures alone costs around £100k so not one for the faint hearted or those who want to pull a scam. The barriers to entry are high.. The FCA haven’t quite worked things out neither have any of their equivalents across the globe. No doubt it will get regulated as it’s needed.. However as someone who’s planning to do an ICO in the next few months, I don’t think you should look at it with complete cynical eyes..
ReplyDeleteI think the doubts come from trying have an ICO where its aonly benefit is PR for their fund. I would hope setting up a real ICO would costs a lot more than £100k or we really are in trouble.
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