Bitcoin Forum

Throughout my experience, i came across a lot of ICO scams. Wouldn't it be great if we can find a way to fix this? Apart from doing due diligence & research on your own, is there any other way to invent some kind of safety features for the ICO dilemma? Let's share our thoughts & idea here...something that's realistic perhaps?

One initiative I am very happy with is the "Inverted KYC". IcoBench (https://icobench.com/icos) asks members of the ICOs team´s to prove identity and possibly a bit of the background and makes an special mention of those who pass this requisite.

I see, that's a good step towards due diligence. Only IcoBench is doing this? how about others?

Only this one that I know. Some investment syndicates are also guaranteeing their investor that the due diligence are properly done as an Incentive.

I really like the idea of inverted KYC, for me it really helps us to avoid scams here. And also one thing to consider is the bounty manager, the one who manage bounty campaign of the ICO.

what kind of investment syndicates? please share.

what do you mean by that? please explain further.

This is the perfect example. Another one is creating ICO with real-world benefits, it's not uncommon seeing RL companies offering their shares/services for cryptocurrencies. If you can afford, this is a really good way of business.

Real world benefits? You mean benefits to those who join either on the issuer side or investor side, right?
What do think about Accrediting the ICOs? What i mean is due diligence, reserach & accreditation done by well-known trusted entities like a well-known & trusted:

• Audit house
• Underwriting house
• Financial house
• Government
• etc

what do you think about that?

These ICOs don't need millions of dollars to start, it is ridiculous.  You can be a successful project without having an ICO like raiblocks.

I agree you don't need millions of dollars to start. and there's a way, do you wanna know how?

yes, you can be a successful project without having an ICO but in the case of raiblocks you need ample funding & resources, rite?

What do you guys think about this article?

Saving ICOs from Themselves

ICOs have transformed the startup fundraising ecosystem. A tech startup today can raise funds more quickly and easily through a token sale than traditional venture capital funding. In 2017, ICOs raised over $5.6 billion, accounting for 30% of all seed funding.

But while this quick and relatively easy fundraising method has allowed many promising projects like Ethereum to raise the funds to allow them to prosper, it’s also lets scams flourish.

Scams & Fraud

ICO investors today are at high risk. Many scammers and fraudsters today create an ICO website and setup a token sale with no intention of creating a working product. Instead they intend to run away with the funds as soon the funds are raised. Statis Group has estimated over 80% of ICOs today are scams.

Recognizing the danger to their users, Facebook, Google and Twitter have all announced bans on ICO advertising, to protect users from scams and phishing attacks. The SEC has shut down several ICOs, forcing them to return funds to investors.

Regulatory Risk

Governments have recognized the risk of securities fraud with ICO projects, and there have been crackdowns on ICOs around the world. In America, the SEC has classified most ICOs as securities, barring ordinary investors from participating. In China, ICOs have been outright banned.

For legitimate startups trying to raise funds for development, the current environment of regulatory risk and uncertainty makes it hard to raise funds through a public token offering.

Opaqueness

The projects which are still going forward with token sales are moving much of their fundraising to private presales which have less regulatory risk for the company. But these private presales are opaque and often creates more risk for crowdsale participants.

Creating a Healthier Token Sale Ecosystem

The market needs better due diligence and oversight, as well as better investor protection. To create this kind of environment, we’re introducing the Accredited Coin Offering(ACO) Platform — a way for the market to self-regulate token offerings.

We’re working with institutional partners including banks, accountants, and insurance companies to provide due diligence, credit ratings, and insurance for token offerings.

This keeps the token sale market healthy, eliminates scamming, fraud and unethical deals, and allows true entrepreneurship to flourish and drive success for the new token economy.

To find out about the ACO Platform and our vision for Accredited Coin Offerings, visit www.acoplatform.com

you can't. do you homework... and if the guys don't answer all questions of all analyst remember it's a big RED FLAG !!!!

i came across this https://www.acoplatform.com
could you please take a look & tell me your thoughts?

hi how's everyone is doing? do you agree that we need to get the ICO/startups to be accredited in order to create a safe & healthy environment for the ICO/startup industry?

What say you?

Simple, abandon the concept the ICO and replace with :
1. Venture Capital if the developer aim to make centralized service
2. Forcing the developer to make/develop few percentage of the project and can be shown/accessed before do ICO/VC.
3. Use community funding system such as what Monero use (https://forum.getmonero.org/8/funding-required (https://forum.getmonero.org/8/funding-required))

great idea. what do you think about this platform i found: https://www.acoplatform.com ? any thoughts?

Typically discount buy groups such as Bank to the Future (which I don't like) and some investment funds that sometimes disclose their research to members, such as Astronaut (formerly Picolo Research). I am sure there are others that have the time and resources to do a true Due Diligence.

I don't know this one and it would take a while to do a proper research. Sorry.

please take a look & tell us what are your thoughts :)

IMHO, what we need is a somewhat revolutionary idea that could help create a safe & healthy environment for the ICO industry, and that idea must be:

1. An immediate effective solution
2. An accredited solution using insurance that guarantees the result of ICO (so it is trust worthy)
3. A solution remedy to the ICO problem and a way of governing ICO
4. Working towards a government supported exercise to benefit startups and investors alike

Do you guys have any thoughts about this?
Are they any teams/projects developing this kind of solution now?

Cryptofunding platforms are an innovative way that is applying blockchain technology and they have been around for several years now. Starting from ICO, these cryptofunding platforms that raised billions of dollars to back varied projects. It is getting high traction now but ICO has its own issue and created craze spreading across the crypto space, is ICO helping the market or it’s creating problem. People start to have mix of positive and negative feelings towards investing through ICO nowadays. We think the ICOs need to fix the problem before Securities and Exchange Commission (SEC) fixes them.

ACO platform will simplify the process of creating crypto funds. The service would allow start-ups to create the fund they need for their businesses and provide a secure investment tool to private investor guaranteed and backed up by the government via accreditation process. It’s not like the wild wild west of ICO where the investors may face serious risks since the token sales are not subject to securities regulations. On the other note, the ACO platform will be the first market-approved crypto fundraising platform available. Major institutional banking and insurance companies will be affiliated with the ACO platform.

The year of 2018, the rise of new Malaysia, it’s the right time to revolutionize new entrepreneurship landscape by enhancing Malaysia’s startup economy. The young Malaysian entrepreneurs feel they have better future now. We have witnessed Malaysia produced high-growth regional startups, i.e Dah Makan (USD 1.3m), BookDoc (USD 2m), RecomN (USD 1m) to name a few, expand their businesses not just in Malaysia but international market too. Start-ups may be a small company but they will play a significant role to Malaysia’s new economic growth. The start-ups will generate more job employments that potentially to eradicate existing problem such as urban poor and unemployment issue. Malaysia’s new economy will be revolutionize by the next-gen start-ups of. Initial Coins Offering or famously known as ICO has been the famous fundraising instrument to a lot of start-ups worldwide. In 2017, famous ICO projects raised millions of USD in just for few hours or days. For instance, project Aragon raised USD 25 mill in 15 minutes, project Basic Attention Token raised USD 35 million in only 30 seconds and project Status.im raised USD 270 million in a few hours. However, with unclear regulations and high risks of fund lost, ICO is considered as a high-risk fundraising mechanism.

The way to fix this is through regulation (SEC) or otherwise. Which in the long term is a good thing for the crypto world. Possibly it would have a short term negative effect but in the long term would increase the quality of ico's and would help to eliminate the scams.
right now the only choice is your own due diligence in investigating the ico through research. I think you can eliminate a lot of ico's this way. After that you are taking a risk but at least it's an educated one. Reverse KYC is an interesting idea however you can also find out a lot in linkedin at the moment.

Yes i do agree with all of your points. But SEC should have a regulation in place right now for ICOs, don't ya think?

We are in the midst of the Blockchain era, it is not a bubble anymore and IDHub decided to partner up with ACO Platform Foundation and move forward to launch their first ACO project. They believe crypto-funding via ACO is an effective way to fundraise their business. They have an option to execute conventional ICO option but for long-term sake, they preferred the accredited process through ACO platform. It is a safe accredited and win-win situation to both them and their investors. Launching an ACO can be a great mark of success for crypto-funding platform but it requires overcoming major hurdles that currently plague the industry. IDHub is sharing their experience the steps taken to drive their successful ACO and how pre-ACO prospects can learn from them.

Yes I do. i think regulation of ico's would cut the launch rate in half at least. Of course regulation would have to come from multiple individual countries for this to have a dramatic effect. I believe the US is slowly moving closer to regulation and we can see them chasing fraudulent ico's already however this is only in the US and there are a lot of other countries in the world launching ico's.

US Laws are the tightest regarding ICO regulations compared to other countries in the world. But if the US SEC is really serious about this matter, they should invite and discuss with entities that can give accreditation or credit rating to the ICOs. So, far we ain't see that coming... bummer..

IDHub, a nonprofit foundation that registered in Singapore, announced its partnership with ACO Platform Foundation. As a member of Enterprise Ethereum Alliance (EEA), IDHub devotes to digital identity solution equipped with three elements: sovereignty, security, and privacy. IDHub had completed its pre-sale and Initial Exchange Offering (IEO), and had been listed on two exchanges: GDEX and LBank.

Through this strategic partnership, ACO reviews and accredits the status of IDHub. Once IDHub meets the standard required, ACO will guarantee IDHub by insurance and facilitate the process of listing on other exchanges. IDHub is the first use case to go through the accreditation process of ACO. It is a tremendous milestone since ACO and IDHub are both foundations committed to leveraging blockchain technology in the social good sector.

Thinking of investing in ACO?

There is no doubt every investment hold some risks, and that is why the investments have potential to make us money. As mentioned in the earlier articles, ACO has accredited processes that made it safer and can be extremely profitable.

If you never heard of an ACO, an ACO is an acronym from Accredited Coin Offering. An ACO in some ways is similar to IPO (Initial Public Offering), in which a company sells off their shares in their businesses to investors but by using Blockchain technology and the automation processes are accredited, seamless and safe.

A beginner’s guide to ACO investing. This investment guide is an introduction and steps to look out when investing in an ACO.

Up until Q1 2018, the total dollar amount raised in initial coin offering (ICO) was staggering USD 6.3 billion a 118% increase in the total compared to previous year. With a total market capitalization of over USD 100 billion, the crypto-currency market has attracted a lot of investors but the concern over lack of transparency in ICOs raised the red flag as well. To overcome this obstacle, ACO Platform Foundation developed an antidote that can maintain the health of ICO’s industry. Famously known as Accredited Coin Offering (ACO), is a new framework for ICOs that reduces the risk for both token issuers and investors through accreditation, ensuring successful and market regulated fundraising.

Crypto-fundraising for social good projects. In addition to business funding, ACO platform can enable social good projects by engaging new supporters, constituents and future advocates. The platform will promote collaborative thinking that can provide solutions and create positive social impact. ACO is a collaboration platform that gets people involve in an early stage to make them feel connected to the project and likely to repeat their support and advocacy. Social communities that involve within ACO platform can start their social good projects and get connected to communities around the world who would like to participate.

Money is not the only thing from stopping people from doing something good for the world. We interviewed two social entrepreneurs in Malaysia and shared the ACO platform for their crypto-funding needs to raise fund for their social projects. They supported the idea of accreditation process behind ACO and agreed that this can symbolize as the fundraising platform for social entrepreneurs.

In what is being perceived as one-sided move in ICO world, countries had taken a more stringent move by introducing a new set of ICO regulations. Russian government made this move to protect the investors and instruct ICO providers that facilitating token sale event will be obliged to guarantee that investors can sell back their tokens.

Big headphone manufacturer, Monster Product Inc has applied to U.S. regulators to launch a giant USD 300 million Initial Coin Offering (ICO), a Securities and Exchange Commission (SEC) filing signed.

During a recent interview, a company spokesperson made these comments: “The Accredited Coin Offering Platform will be the first market-approved crypto fundraising platform available. Major institutional banking and insurance companies will be affiliated with the Accredited Coin Offering Platform.” He goes on to say: “The platform will provide an end-to-end process for creating ICOs on an easy to use the platform. ACOs will enjoy access to underwriting services while investors will be able to access projects approved by professional institutions.”

IDHub, a nonprot foundation that is registered in Singapore, announced its partnership with the ACO Platform Foundation. As a member of the Enterprise Ethereum Alliance (EEA), IDHub is devoted to digital identity solutions equipped with three elements: sovereignty, security, and privacy. IDHub had completed its Pre-Sale and Initial Exchange Oering (IEO), and has been listed on two exchanges: GDEX and LBank.

ACO Platform Foundation is proud to announce its partnership with Macallan Capital Group. Macallan Capital is a private venture capital establishment based in Singapore that has been providing financial audit and solution for clients in Asia markets over the last decade. Macallan is the first accredited service provider (ASP) for the ACO platform.

“Macallan as VC is very excited about the impact of blockchain crypto-funding platform such as ACO. This is the future and we believe this accreditation alliance will benefit VC and investors in the long run.”
said Mr. Aditya Bhugtiar, Group Managing Director of Macallan Capital.

This is the race to reality. It is not a bubble anymore and it is happening now.

The rise of Accredited Coin Offering (ACO) — as controversial as it may sounds — is a signpost to the new paradigm of decentralized and democratized fundraising mechanism, customer-driven business models that supersede beyond the borders of any one country. Some say it’s a significant paradigm shift beyond the industrial edge which becoming conservative and require a crypto-innovative overhaul to stay relevant in the new world economic model. ACO is an accredited crypto-fundraising enabler that any country should consider. It’s mission to rescue the ICO industry to be seen as the antidote to become stabilizer and maintain the industry health.

As the industry becomes more regulated this will happen anyway. Until then, there are a few good sites out there that review ICOs. Try finding one that you agree with and then using their recommendations.

In perfect world there should be a working prototype of ICO product.
Cause now most of them sell an idea without any knowledge of how to make it live
hoping that ICO money will help them, whcih is obviously not always so

yes i agree. cyrpto companies can't forever fighting with the regulators...

This ACO platform is working towards it. IDHub (idhub.network) is one of their success stories..

ARL International Limited (ARL), which is associated with the Labuan based Archipelago Insurance Group and ACO Platform Foundation today announced the partnership for ACO. A Perfect blend between two organizations to streamline insurance underwriting process that will strengthen the accreditation within ACO. The Archipelago Insurance Group underwrites all lines of General and life insurance including Takaful, Reinsurance based in Malaysia.

ARL is a Labuan based general insurance broking company with operations in Kuala Lumpur, Malaysia. ARL’s principal activity is to mainly structure and broker international insurance products and services for both individuals as well as corporate customers.
“ARL is excited about our new partnership with ACO Platform Foundation. This will enable us to deliver the first of its kind underwriting service and workflow functionality for ACO platform”, said Richard Goh Ah Hong, the Group’s Chairman.

I had a lot of thought on this and posted on the topic phases ico. I think there are two major levels of ico fundraising the series a/b crunch where millions are appropriate but you should have a product or demo at the very least, and the small early startup who can't get money any other way. I think current systems do a good job for the former but without a turnkey service you end up with people who add tokens pointlessly to their software rather than doing a security token (with all the legal compliance etc) and using that to fund development of non blockchain software.

I really like this idea, but instead of just knowing information to only one party why not both?

I have idea to suggest.
Don't make fun of this.
It is better to have a request from fbi so that a developer can run a project in  legitimate way and can also help investors be secured. If developers are scam then fbi can trace them easily.

Is it exaggerated? 

beta version of the platform will be ready in August or September. It will be used by a global startup awards entity..

nope its not exaggerated. and im sure FBI are on the topic of ICOs. The ACO Platform have no problem with the regulators, authorities or governments...in fact they're are open to work with them.

the Malaysian SC have already called them up & they will be having a series of meetups to discuss further on how they can work together.

The Rise Of Utility Economy (UE)

The fast-growing world of tokenizing business through Blockchain technology raised up a new economic phenomenon known as the Utility Economy (UE). In what is called the Utility Economy, a term coined by Ted Huang, the father of FinTech, imagine the token value created in all the crypto-land perspective can simultaneously create the visibility of identity, information, ownership, property and any real-world objects that creates its own unique digital representation. Trust is fragile, the Decentralize Ledger Technology (DLT) deployed to unleash the control that used to be placed in the hands of a few. Once we make systems decentralize, every participant share the responsibility and authority to display transparency.

All the digital representation symbolized in token form will fuel up all the elements that generate systematic reinforcement towards target behavior. These reinforcers in tokenized form having the behavior to interact with other reinforcers in the different business environment making utilization of future access to product and services. This is what we coined as the Utility Economy.

The Blockchain is venturing to revolutionize the new internet and the world is experiencing a new economic phenomenon known as the Utility Economic. This revolution is tokenizing every business in the world and it makes sense that the Utility Economic is booming up the sector of utility-to-consumption (UTC) business model to serve B2B2C. The Utility Economic communities comprise of entities from businesses and mass consumers that communicate electronically and transacts using decentralize platform powered by Blockchain. This is Glocal agenda both to serve global and local businesses and this is massive.

“The Utility Economic is upcoming next. It has the potential to underline real consumption of asset value using blockchain technology and enhance it” said Ted Huang, Father of FinTech who coined the term Utility Economic.

June 20, 2018 - Kuala Lumpur, Malaysia, the newest edition of a tech foundation called Crypto Valley Malaysia (CVM) has launched. The CVM believes that it will facilitate to combine industries, government and business communities need in the implementation of Hybrid Exponential Technologies such as Blockchain, Big Data, Artificial Intelligence, Machine Learning, Singularity Technologies and many others to solve the real industries and business needs.    

CVM CEO, Faizal Shebli conclude in his welcoming speech “CVM is aiming to put Malaysia to the eyes of the world, Blockchain best practices will bring huge benefit to the country. Both public sectors and industries will see how blockchain bring the Internet of value: a new decentralize platform that will reshape the world business”.

The ACO Platform Foundation CEO, Mr Arthur Yao was making headlines at the Frankfurt World Blockchain Summit 2018 by Trescon Global. He gave a tech talk to the audience about The ACO Platform and its role in the Utility Economic (UE) Ecosystem.

The session gave a positive rapport throughout the World Blockchain Summit and The ACO Platform Foundation is committed to provide the best cooperation to interested parties involved.

July 29, 2018 — Kuala Lumpur, Malaysia, the implementation of a digital asset exchange in Asia is aggressively led by exchanges players worldwide. With Crypto currency is being widely accepted in most countries, the aim of the digital exchanges players is not only to list currently trading digital coins but also to provide liquidity facility for all companies within Southeast Asia region.

ACO team Malaysia had the opportunity to discuss on a potential collaboration of digital exchange impIementation in Asia with United Digital Asset Exchange (UDAX). They have successfully launched UDAX Korea, and UDAX Hong Kongis going live only on 31st July, 2018. According to Dr Bobby Lieu, CEO of UDAX, the first professional digital asset exchange that consists of brokerage firms and investment banking professionals in the world.

Halal Utility Economic Tokenization In The Making

The halal global market value, according to statistic.com, the statistic shows approximately 1.4 trillion USD in 2017 and are expected to reach 2.6 trillion USD in 2023. For the benefit of those who may not familiar with this industry, Halal is an Arabic word for “permissible” and is often used to refer to food and drink which are acceptable for Muslims to consume under the Islamic law. How does this industry relates to blockchain some might ask? Fair question. One of the most compelling uses of blockchain technology is the ability to record information and verify where and when it was added to the network.

This will be a strong compulsory feature for Halal consumers where traceability and transparency of the source material for Halal food. That is the answer to how Blockchain technology is relevant to this venture. The adversity of knowing when and where a product was made is interesting, being able to trace its history is powerful and tokenizing it is the next big thing in Utility Economic. Digital tokens are designed for Utility Economic activity and blockchains are ideal to handle them.

July 3, 2018 — Kuala Lumpur, Malaysia, the accreditation process in ACO makes this new fundraising mechanism safer and potentially can benefit 3000 micro businesses in Malaysia as part of the strategic initiative to accelerate startup economy in this country. A significant advantage of an ACO for investors is that it is open to everyone. The costs associated with marketing ACO and the contribution settlement are considerably lower than some of the other popular mechanism used for fundraising.

I don't know if this is the answer you are looking for but the way I start my research is by looking if the team has taken an SSL certificate for their website, and if they did, for how long they took it. The project you are talking about took an SSL for only three months.

https://imgur.com/a/1j7wONi

I am not the one who is going to do any additional research about a project that doesn't have the money to pay for at least a year of SSL certificate. Such certificate cost a max of 100€ a year, and you can even get it for free when you know what you are doing...

Also, if there is at least one person with common sense in that team he should know that you don't save on such things. No, I'm sorry, not that you don't save on such things, in fact, it's quite the opposite, you DO save on it by taking one for a year or three. When they do stuff like this, whit their bad Wix.com design, the only thing I can think of is that they will probably exit scam and after three months the site will probably just disappear with investors money.

There really is no way to be 100% certain, so I suggest to not focus on ICOs, and focus on establish coins. I don't think you will be missing much, since the ICO market seems to be saturated and people dump as soon as the coin launches. Wait for when the coin is at least on the exchanges.

I don't think there's much you can do. Scammers will be scammers.

I know a coin who raised over 230 million dollars, and after launch it steadily went down to $4,000,000.

That is such a disaster, you would think it would be something that's talked a lot about, but no, it's just another failed ICO.

There have to be so many horror story of people losing everything.

This is where regulation could be a positive in the world of crypto. Is the ICO and the people running it had to register with a government entity, and could be held accountable if there was a fraud.

For me there has to be a few things in an ico before I invest. Only that I've been burned countless times in the past.

1. A proven track record of setting targets and meeting them
2. Honesty and transparency between investors & the core team. That way if there is a delay in the project then people that laid their money on the line are the first to know.
3. A credible track history in the market they wish to incept - if not, then a bunch of transferable skills, and a bright eyes and bushy tailed approach at what they want to achieve.
4. Realistic goals
5. No price forecasting. i.e. invest now and watch your profits go $$$$$$$$$$$

And a few others, but I think those are the main ones for me.

We invest in an idea; so broken English and a rubbishy website isn't enough to put me off -- they might have a fantastic idea and a real credible team to get stuck in to whatever it is they are planning! Language and Design skills/team would probably come after investments start rolling in.

you have a very good point there. i'm gonna do a deeper research.

that's a wise move. thanks for the advise!

yeah but we need to identify them as quickly as possible..

yeap that's a freaking horror story. imagine the agony that people have to endure everyday. crypto should be safe and secure, but reality wise its open for scams to flourish...

i agree. government or regulators should be one of the accredited bodies.

yeah the doggedness of the ICO is alarming. 

perhaps it is best to establish a decentralized ICO platform which holds investors crypto's which cannot be withdrawn unless certain criteria are met(inverse KYC/proof of project as an example). not only gives security for investors money project developer can do some free/cheap advertising to the platform. sometimes inverse KYC of the ICO raters is not enough I remember Hashcard whom inverse KYC is positive yet it turns out to be a scam.

That is a good proposition.
There is another way. Why not create a crowdsale smart contract that allows to withdraw funds only when the team reaches certain milestones? The decision is made by voting of 50-70% of contributors?
If the project team dissapears than the proposition could be made by any of the contributors to refund the investment. The same logic: 50-70% of contributors vote and the refund is processed.

Now. There could be more complicative situations when the team will be agains the refund or possible attack by competitors project for instance (guys who will want this current project from our example to go bankrupt).
The possible solution is to allow team achieve small results and withdraw small amounts. But if you ask to withdraw 3 times and 3 times 50-70% of contributors did not vote for it (during a month) than any of the contributors can ask create refund proposal and vote for it.

What do you think about this way of fund management by the contributors community?

This could work well with a stable coin, since a project is likely to have fixed expenses or expenses in fiat a stable coin easily redeemed for face value is needed.

Dehedge project was I think a great solution for this. We've seen it doing ICO which had already been working with some projects like the bubbletone. Dehedge offers safer investment for the ICO in cryptocurrencies. Its a Risk-hedging platform for crypto investors, check this out https://dehedge.com

So if you are going to invest, invest using their platform.  I haven't tried it thought but that's what I've learned from the videos I've seen.

thanks for the link, we'll check it out soon.

we still need accredited parties to verify the ICO first.

still...the best way would be a few well known regulator/government/insurance companies that can guarantee the platform as an accredited decentralized platform.