Since the beginning of January 2018, the valuation of companies specializing in Blockchain and Crypto-currencies have reached a historical threshold of 850 billion dollars. Although, there has been a significant decline of crypto-currencies’ value, it is now clear that this field is in a revolutionary process.
In fact, the utilization of the Distributed Ledger Technology (DLT) by thousands of computers, without the intermediary of a controlling entity, has led to a substantial technical progress.
DLT’s technology, allows the encryption of data and the encryption of the transfer of virtual-currencies (Token), to have a great impact of the global financial activity.
The years, 2017 and 2018, were undoubtedly very successful in terms of raising funds through Initial Coin Offerings (ICOs). In 2017, approximatively 600 companies raised around 7 billion dollars through an ICO. However, the main question that remains is if the qualification of crypto-currencies, used for an ICO, are either used as a virtual currency, a “Utility Token” or a “Security Token”.
In 2018, over 2500 companies raised almost twice the sums raised in 2017, (around 12 billion dollars).
The highest part of the fund raised more than 90%. The fund has been accomplished through the ERC 20 protocol on the Ethereum Platform.
So far, the two companies that raised the most funds are :
– EOS, which raised around 4.2 billion dollars on its own, and
– Telegram, which raised about 1.7 billion dollars.
Israel hosts also major representatives of ICOs: Such companies include, Bancor, who has raised 157 million dollars, PumaPay, and Sirin Labs.
2019 is expected to be the year of change, switching from ICOs to STOs (Security Token Offerings). The use of, “Smart Contracts”, for raising funds and solving asset problems, (i.e. real estate, shares, rights attached to those shares etc.), will lead to a significant increase of funds raised in this area.
At Lior Pick, & Co, we can advise you in the legal and tax establishment of a company, subsidiary in Israel, or abroad, in terms of regulation, taxation, a shareholder’s agreement, the issuing of crypto-currency, etc.
Our Law firm will also assist you in the elaboration of the White paper, the KYC/AML (Know Your Customer/Anti-Money Laundering), opening of a bank account, etc.