Blockchain TechnologyICO Development

Guide to Launch an Initial Coin Offering in USA and Canada

ICO or Initial Coin Offering is the type of funding using cryptocurrencies which means that investors exchange their cryptocurrencies like Ethereum and Bitcoin in exchange for the crypto-token or new cryptocurrency. ICOs are used as a medium to fund the development of new cryptocurrencies, and if the pre-created token is in demand, then it can be sold and traded on other cryptocurrency exchanges. The purpose of launching an ICO is to raise fund for the company’s token based project.

How to Launch an ICO?

Communicate the Idea
The first step to launch an ICO is to communicate your ICO ideas and plans with others. Share your plan based on which the token is developed to various cryptocurrency communities and investors. This is possible with the help of whitepaper and roadmap. The potential investors’ feedback helps in understanding whether your plan is suitable for your target audience. So, communicate the idea and create a business model for your ICO.

Build the ICO Team
The next step is to create a strong team. You need a team of 20-30 people like content writers, editors, strategists, designers, legal specialists, and programmers. Ensure that your team members are experienced and are passionate about launching an ICO. To increase the value of ICO recruit a team of highly qualified professionals who are committed to launching an ICO.

Prepare the Price Plan
The next step is to prepare a pricing plan for your ICO. Here are some fundamental ways to consider while preparing a pricing plan.

Undetermined Price
The final price is not decided yet, and potential investors receive a token amount for their contribution to your ICO

Fixed Price
The price is fixed, and the participants can buy the tokens. The trading starts after the freezing period is completed.

Dutch Auction
The first tokens are most expensive but over the investment period, the price decreases.

Price Rise ICO
Participants get the best possible deal for their tokens.

Create ICO Whitepaper
ICO whitepaper is the most basic and crucial document for your project as it allows the participants and investors to have all the information about your project. An excellent white paper involves details like timelines, target fund amount, terms to buy, token and its value, project technology, and concept, and graphics. The typical structure of a white paper is as under:

  • Introduction
  • Background
  • Market research
  • Product concept
  • Benefits
  • Technology
  • The ICO
  • Token
  • Roadmap
  • Use of funds
  • Team
  • Privacy policy
  • FAQs

Website Creation and Advertising
The website is the face of your ICO project, to ensure that it is presentable as well as informative. It should include information such as your project, its launching date, why they should invest in it, and a link to the white paper and other documents. The next step after creating the website is to announce it to everyone. You can seek the help of a professional marketing agency that will take care of your PR, advertising, and social media marketing.

Token and ICO Launch

You can launch the token on any of the available platforms. The tokens are released to the investors and participants after the sale concludes. Ensure the security of the ICO website during a sale as hackers may try to intrude the safety. Also, promote the launch of your token and ICO on various social media sites like Facebook, Twitter, Telegram, YouTube, LinkedIn, Reddit, and Bitcointalk.

Factors to Consider while Launching ICO in the USA

In 2017, the US Securities and Exchange Commission ruled that ICOs will be treated as the sales of security. This law dramatically increases the cost and limits the pool of potential buyers. The SEC report stated that DAO tokens are considered as security.

“… federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized autonomous organization, regardless whether those securities are purchased using U.S. dollars or virtual currencies, and regardless whether they are distributed in certificated form or through distributed ledger technology.”

The ICO development services have to consider the Howey Test which is developed by the Supreme Court and implemented by SEC. It is conducted for ICO tokens to not fall under utility token. Otherwise, investors will participate in a speculative enterprise that leads to a higher risk.
Factors to Consider while Launching ICO in Canada

In 2017, the Canadian Securities Administrators (CSA) included ICO and tokens under security.

Securities may only be sold after a receipt has been received from a securities regulatory authority for a comprehensive disclosure document called a “prospectus,” or pursuant to a private placement in reliance on a prospectus exemption;

Businesses and individuals in the business of trading in or advising on securities must be registered appropriately or rely on an exemption from registration;

A platform that facilitates trades in coins/tokens that are securities may be a marketplace and need to comply with marketplace requirements or obtain an exemption from such requirements.

The ICO tokens as stated in the notice may come with features of derivatives, and it might be regarded as such and subjects to derivatives laws of the Canadian government.

So, in conclusion, ask yourself, does this benefits and added features improve the functioning of your business? Also, if the answer is yes, then go ahead! We hope you have found this article informative and interesting. For more information or queries visit at icodevelopment.io and know more about this technology. You can also contact us or send us an email at sales@icodevelopment.io