Indiegogo Announces Support for Initial Coin Offerings on New Dedicated Platform
Indiegogo, the popular crowdfunding website, announced on December 12, 2017, that it would be making its first foray into the world of cryptocurrencies and initial coin offerings (ICOs). Effective immediately, the company will now support digital token sales as long as they are carefully vetted and comply with the US Securities and Exchange Commission guidelines.
In a blog post, Indiegogo stated that the ICO economy of $3.6 billion presented them with a lucrative opportunity to aid new token sales. The company is also of the opinion that digital tokens are a revolutionary concept, providing investors with increased utility and liquidity as compared to other investments. To date, the Indiegogo platform has raised more than $1 billion in crowdfunded campaigns.
The fundraising website went on to detail three ways in which it would attempt to win investor and market trust in ICOs. Indiegogo is convinced that their approach of making token sales more accessible, compliant with US regulations and maintaining a carefully curated selection will help its dedicated ICO platform become an industry leader in the near future.
The platform’s first token sale is for the “Fan-Controlled Football League,” which claims to leverage blockchain technology and user interaction to let fans of the sport control every aspect of the league, not too far off from fantasy football. Even with a minimum investment of $500, the ICO has attracted over $2 million in investor funding or about 41 percent of its $5 million goal for its token pre-sale.
While Indiegogo seems bullish on the concept of ICOs taking off, many regulatory authorities and governments around the world have openly shown far lesser enthusiasm. Furthermore, in December 2017, the US SEC released a guideline warning potential investors of fraud and malice currently prevalent in the industry. The committee, however, did not immediately dismiss the concept of ICOs and even went as far as stating that they may prove to be “disruptive and transformative.”
On the other end of the spectrum, countries such as Vietnam and China have displayed open hostility to the idea of Initial Coin Offerings by imposing nationwide bans on them in the name of consumer protection. Several other countries, including India, are reportedly considering following suit.
In related news, a spokesperson for one of Indiegogo’s primary competitors, Kickstarter, told CoinDesk that the company would not be adding support ICOs in the foreseeable future. No further detail was divulged, but it is safe to assume that the platform does not wish to associate itself with the legal and moral conundrums that come with the cryptocurrency ecosystem.
As of now, the US remains to be one of the safe havens for the cryptocurrency ecosystem and by extension, the ICO market, to continue operating, albeit under heavy regulatory restrictions. After the Chinese government banned digital currency trading and ICOs, several enterprises moved to Japan instead, where cryptocurrencies have been officially considered legal tender since September 2017.
Indiegogo’s entry into the ICO market is an audacious attempt to make digital token sales fully compliant with regulations and risk-free for its users. Whether it will actually see mass adoption and success remains to be seen though.