U.S. V. Zaslavskiy, 17-cr-0647, U.S. District Court for the Eastern District of New York (Brooklyn), just might go down as a definitive case for cryptocurrency enthusiasts. Many, many billions of dollars generated through initial coin offerings (ICOs) are now, according to a federal judge, considered under the jurisdiction of securities laws.
“Per the indictment, no diamonds or real estate, or any coins, tokens, or currency of any imaginable sort, ever existed – despite promises made to investors to the contrary,” Federal District Judge Raymond J. Dearie ruled. “Simply labeling an investment opportunity as a ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract – a security – into a currency.”
Prosecutors in the case are touting it as a first. Maksim Zaslavskiy, a Brooklyn businessman, conspired and committed two counts of securities fraud during two ICOs, they allege. In his defense, Mr. Zaslavskiy suggested the law as written was too vague, and claimed the ICOs in question were currencies, and not, in fact, securities.
ICOs, of course, are a relatively novel and new way for startups to raise capital. Taken from the legacy practice of bringing a traditional company to market through an initial public offering (IPO), ICOs skip over much of the friction IPOs have gathered as more laws and regulations are heaped upon them. Should the same standards apply to ICOs, very few, if any, would survive. ICOs are usually characterized by their lack of officialdom, their appeal to every-day investors without regard to designations such as being accredited. This has made for a wealth transfer revolution, but it has also brought upon investors many scams.
The ruling set the stage for a jury to make the ultimate determination about whether indeed an ICO, as put forward by Mr. Zaslavskiy, is indeed a security. The judge did make it clear he believed the case fit well within securities law as presently constructed. The ruling, if upheld, could set precedence for future ICO-related suits brought about by both alleged victims and regulators.
The defense was hoping to stop the case in its tracks after their client was charged with pushing cryptocurrencies, promising they were backed by diamonds and real estate. Prosecutors could find no evidence to the defense claims, and a judge, rather than ruling on the merits of the case, merely agreed existing law could be applied in this instance if a jury found in favor of the government.
Experts are weighing in on the preliminary decision, insisting this clears the way for the Securities and Exchange Commission (SEC) to get even more aggressive when it comes to ICOs, an industry closing-in on nearly $20 billion raised so far this year. In determining whether a financial product can be classified a security, the SEC often appeals to the a 1946 Supreme Court case which established the so-called Howey Test. Simply put, an asset is a security when an investment of money is handed over to a common business, and that investor expects profits to be siphoned to him by way of another’s toil. Current SEC Chair Jay Clayton, as recently as this summer, has reiterated he believes all such ICOs belong under the securities designation.
Russian Promoters, Offshore Crypto Bank Targeted in Orders
Texas Securities Commissioner Travis J. Iles took emergency action Sept. 18 to stop the fraudulent offerings of investments in three separate schemes involving cryptocurrencies. Commissioner Iles entered separate emergency cease and desist orders against Coins Miner Investment Ltd., a cryptocurrency investment promoter operating in Russia; DGBK Ltd., an offshore digital “bank” that says it has developed hack-proof storage for virtual currencies; and Ultimate Assets LLC, a supposed cryptocurrency and foreign exchange trader.
Coins Miner Investment Ltd.: Alleged Russian Hoaxers
Coins Miner is soliciting funds from Texas residents by pretending to represent an established U.S. cryptocurrency platform.
According to the Emergency Cease and Desist Order, Coins Miner is manipulating its email solicitations to make them appear as if they came from Coinbase, a San Francisco-based company that operates an online platform for buying, selling, and storing digital currency.
Ana Julia Lara, a person affiliated with Coins Miner, falsely claims to work at Coinbase as a cryptocurrency trader. Lara is also sending prospective investors a photograph of herself with the president of Ripple, a cryptocurrency and transaction company, but the person identified as Lara is a vice president of CoinTelegraph Media Group.
The solicitation directs prospective investors to a website maintained by Coins Miner, where the company offers investments in programs tied to the mining of cryptocurrencies. On the site Coins Miner makes numerous fraudulent misrepresentations to try to make its investment offering appear legitimate.
The company claims it is based in the United Kingdom, but it operates in the Russian city of Volgograd.
Coins Miner has also misappropriated a video of a Fortune journalist to promote its offering. The video on the Coins Miner site shows the journalist discussing cryptocurrencies next to a superimposed Coins Miner logo.
Neither the journalist nor Fortune authorized the use of the video, which was filmed for Fortune as part of its coverage of cryptocurrencies.
Coins Miner has manipulated publicly available media in other ways. It posted stock video footage that purports to shows its “expert team” of technical and financial professionals, its office, and its computer hardware.
The Coins Miner investments are securities under Texas law, but the offerings are not registered for sale in Texas and neither Coins Miner nor Lara are registered to sell securities.
DGBK Ltd.: Soliciting Investors with Supposed Obama Endorsement
DGBK Ltd., also known as DigitalBank, is a Belize-based company that says it is developing a hack-proof device to store and transfer cryptocurrencies.
According to the Emergency Cease and Desist Order, DigitalBank is soliciting funds to develop a digital wallet for cryptocurrencies that can be opened using a person’s biometric data. Digital wallets that store virtual currencies are usually opened with a lengthy password known as a private key.
The company claims the wallet, which it calls a Photon Encrypted Ledger Key, will also permit the anonymous, untraceable transfer of both cryptocurrencies and fiat currency such as the U.S. dollar.
The Enforcement Division of the State Securities Board started investigating DigitalBank after a tip from a Texas resident who works in the cryptocurrency industry and was approached by a principal of DigitalBank.
DigitalBank is offering prospective investors both shares in the company and the opportunity to buy its own virtual currency, a digital token called DGBK. According to the company, investors who purchase the token now can earn a return of 1,900% once it is sold in an initial coin offering next year.
DigitalBank is making liberal use of a 33-second video of Barack Obama to promote itself. In the video, taken at the 2016 South by Southwest interactive festival in Austin, President Obama generally discusses advances in technology and encryption that may allow the creation of impenetrable devices and systems.
DigitalBank is telling investors to view the video to “try to understand what Obama in 2016 already understood about the company.” The company embedded the video throughout its website, on social media, and in correspondence to investors.
DigitalBank is not, however, informing prospective investors about its technical expertise or financial support. The company says it employs cybersecurity experts, blockchain and encryption engineers, and has the support of a major financial institution, but it is not naming or providing the background of most of them.
The investments DigitalBank is offering are securities regulated by Texas law, according to the order. Neither the company nor the principals named in the order are registered to sell securities in Texas.
DigitalBank and two of its principals are telling potential investors that they can participate in a “bounty program” that permits them to earn compensation for referring new investors to the company. But the company is not disclosing that participating in such a program requires a person to be registered to sell securities.
Ultimate Assets LLC: Allegedly Fraudulent Crypto, Forex Offerings
Ultimate Assets, which lists an address in Arlington, Mass., is publishing online advertisements soliciting Texas residents for its cryptocurrency and foreign exchange trading program. Ultimate Assets is telling potential investors that an initial investment of $1,000 will turn into $10,000 in three weeks.
Ultimate Assets and its representatives claim an initial investment in the trading program is fully guaranteed, according to the Emergency Cease and Desist Order. Its investment contract says, “a refund will be issued in cases where [the] investment could not yield profits.”
The investments being offered are securities under Texas law. Daniel Dishmon and John Jason Woodard, the individuals named in the order, are violating the Texas Securities Act by offering securities investments without being registered with the Securities Commissioner.
Ultimate Assets, Dishmon and Woodard are also engaging in fraud by failing to inform investors of the regulatory, market, and technical risks in the trading of cryptocurrencies and foreign currencies.
Ultimate Assets itself appears to be a phantom entity. It is not located at the address listed on its investment contract and the state of Massachusetts has no record of corporate filings by Ultimate Assets.
China’s Central Bank Warns Investors of ICO
China’s central bank, the People’s Bank of China (PBoC), has today, September 18, issued a new public notice “reminding” investors of the risks associated with Initial Coin Offerings (ICOs) and crypto trading.
The notice, released from the bank’s headquarters in Shanghai, reiterates the severe line that has been adopted by the country’s Office for Special Remediation of Internet Financial Risks, which first introduced a blanket ban on ICOs in September 2017.
Today’s notice censures the “unauthorized” and “illegal” ICO financing model for posing a “serious disruption” to the “economic, financial and social order”:
“[ICOs are] suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes and other illegal and criminal activities.”
The PBoC has today hailed the successes of the country’s stringent restrictions that have targeted ICOs and a broad spectrum of crypto-related activities to date, claiming that:
“[T]he global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble caused by skyrocketing global virtual currency prices in the second half of last year in China’s financial market. The impact has been highly recognized by the community.”
Nonetheless, the bank recognizes that several challenges remain, notably the prevalence of offshore exchanges that are used by investors to circumvent the mainland ban.
The PBoC notes that the Office for Special Remediation of Internet Financial Risks has now adopted a series of targeted measures, including blocking up to 124 IP address suspected of providing a gateway to domestic crypto traders.
It further points to redoubled efforts to “clean-up” payment channels and strengthen monitoring and inspection mechanisms, noting that around 3,000 accounts have already been closed as a result of increased oversight. Lastly the notice outlines recent measures undertaken to counter the circulation of crypto “hype” materials.
Brazilian Football Club to Launch Cryptocurrency, $20 Million ICO
Just days after French soccer giant Paris Saint-Germain football club (PSG) announced its own cryptocurrency, complete with an initial coin offering (ICO), Brazil’s Avaí Football Club has come up with a similar plan.
Announced Wednesday, Avaí FC has partnered with blockchain-based sports investment ecosystem SportyCo and football investment platform Blackbridge Sports to raise funds worldwide through the ICO, aiming to raise $20 million in the sale.
According to the official news release, the coin, dubbed Avaí FC Token, is said to be available for sale in October, with the ICO ending in early November. Football fans can be a part of this ICO vision, which aims to bridge the gap between the new fintech industry and sports using blockchain technology, the release added.
The president of Avaí, Francisco José Battistotti, stressed that the ICO would help the football club in broadening the global football fan base. With this vision, he said that Avaí would be a stable member of the Brazilian Series A Championship and reach the Copa Libertadores. He added:
“We are very happy to do so in partnership with SportyCo for being the first sports company to make an initial money offer, paving the way for other clubs around the world to provide funding for their sporting activities in this new way. “
Avaí FC will receive blockchain technology from its official partners SportyCo and Blackbridge Sports. Each token will be priced $1 with the sale period lasting for a month, a report stated. The token will then be listed on various cryptocurrency exchanges, making it easy for fans to trade.
According to the club, if the trading value of the token drops, it “will always provide a valuable experience or service for token holders wishing to participate.” If the tokens sold do not go beyond $8 million threshold, the funds will be returned to buyers, and, if the tokens sold reach more than $8 million while less the target of $20 million, the rest of the tokens will not be available for sale, the report added.
“Money raised from the crowdsale will go straight into club infrastructure which will stay with the club forever,” Marko Filej, SportyCo’s co-founder, said. He further said:
“With this initial money offer we are opening a new chapter in football and the sports industry in general.”
The launch event that took place at the Ressacada Stadium Auditorium in Brazil, attended by President Francisco José Battistotti and members of the board and councils of the club, representatives from the Brazilian Association of Cryptomoedas and Blockchain, and other guests.
‘Crypto Assets Are Here to Stay,’ Says EU Commission Vice President
The European Commission, the executive body that proposes legislation for the EU, will this year conclude a regulatory assessment for the governance of crypto assets, because they are “here to stay,” a high-level has official said.
Speaking at a press conference after a meeting of the Economic and Financial Affairs Council last Friday, Valdis Dombrovskis, vice president of the European Commission, said member states are supportive of moves to chart regulations governing the cryptocurrency industry in the economic region. Dombrovskis said:
“We also had a good exchange of views on crypto-assets. We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow.”
Further, he suggested that initial coin offerings (ICOs) have the potential to become a viable form of alternative financing. “Already last year, ICOs helped raise over $6 billion in funding and this year this figure will be substantially bigger,” he said.
To make the most of this potential, Dombrovskis said the challenge right now is how to “categorize and classify” crypto assets and whether the EU should use existing financial market rules or create a set of dedicated regulations for cryptocurrencies.
“In this context, we are currently working together with European Supervisory Authorities on what we call regulatory mapping of crypto assets to answer exactly these questions,” he said. “This will provide a solid ground to build on and to decide on further steps in this area.”
Dombrovskis has previously made positive remarks on ICOs as an innovative fundraising method, as reported by CoinDesk in February. He indicated at the time that regulators would take more of a case-by-case approach to govern specific token projects, although he conceded more work would need to be done by the commission.
And he isn’t the lone ICO-friendly lawmaker in the EU. Last Friday, a Member of the European Parliament suggested a new rule governing ICOs that would place an upper cap on token sale proceeds, but would also make eligible projects accessible across EU member states.
Los Angeles Dodgers Baseball Team to Hold Giveaway of Player Crypto Tokens via ETH
The Los Angeles Dodgers, a U.S. professional baseball team, will hold a giveaway of crypto-based athlete tokens at the end of this month, according to an official press release on Dodger Insider September 7.
The statement reports that Dodger fans will be able to get tokens — representing Dodgers players — convertible to Ethereum (ETH) during the game against the San Diego Padres scheduled on September 21.
During the so-called “Digital Bobblehead Night,” guests will be able to download tokens of such athletes as pitcher Clayton Kershaw, third baseman Justin Turner, and Curaçaoan pitcher Kenley Jansen.
As the statement explains, the tokens will be distributed according to the point of entry, with first 40,000 ticketed fans in attendance reportedly set to receive a card with a unique code that can be unblocked and transferred to an Ethereum wallet. The character crypto tokens will be selected randomly, with approximately equal share of Kershaw, Turner, and Jansen codes.
Dodgers’ CMO and Executive Vice President Lon Rosen commented that the “first-ever [c]rypto giveaway” in sports will allow them to “explore an entirely new marketplace with our fanbase,” as well as to “pique interest” of Dodger fans and “launch a new age of digital collectibles and promotions.”
Earlier this summer, the Sacramento Kings basketball team partnered with crypto mining supplier MiningStore to install Ethereum mining hardware in an indoor arena in order to pass crypto earnings to a scholarship program.
In early June, the world’s largest crypto exchange, Binance, made an undisclosed investment into blockchain-based esports voting platform chiliZ, so as to provide the sports industry with a “fan-driven token ecosystem for traditional sports teams.”
ASX Probes Penny Stock Seeking to Raise $15 Million in an ICO
The Australian Securities Exchange (ASX) has launched a probe into an IT firm behind a listed penny stock seeking to raise $15 million via an initial coin offering (ICO) for the launch of a cryptocurrency exchange.
Called Byte Power Group (BPG), the public firm issued a statement on Wednesday with answers to a total of 17 questions raised by the ASX requiring the firm to provide details on its intended token sale, disclosed on July 19.
Based on a release at the time, BPG aims to issue a total of 1 billion Byte Power X Loyalty Tokens (BPX Tokens) and plans to sell 25 percent of the amount to private investors at a price of US$0.06 per unit.
The goal is to raise as much as $15 million for the firm to fund the launch of the exchange, where the BPX Tokens can be further traded and used to offset transaction fees. The remaining 75 percent will be allocated for “pre-registered users of the exchange, company special releases, pre-opening and future marketing drive,” according to the plan.
As BPG aims to become the first publicly traded company in Australia to launch a cryptocurrency exchange via the ICO funding model, the move sparked concerns from the ASX over whether it is “in compliance with the ASX Listing Rules.”
On Aug. 1, the ASX’s compliance team sent a letter to BPG, requiring the firm to justify the legality of the planned operation, listing the 17 questions that asked about the status of the ICO, whether it had obtained any legal advice and more.
In today’s written response, BPG said it had already started selling the tokens to private investors in Australia and Singapore with a plan to further roll out the scheme in Hong Kong. It has not responded to a CoinDesk enquiry on how much it has raised so far, or whether any of the 75 percent of the total tokens would be further sold to investors.
In both of the jurisdictions in which it has started selling tokens, BPG claimed it received legal advice that the tokens are not deemed as securities, claiming they are not regulated as a financial product under the Corporations Act of Australian law.
Menlo One ICO
Menlo One is a US-based framework for building decentralized applications with the speed of traditional web apps. The decentralized database and Proof-of-Reputation incentive system will enable the Web 3.0 generation of marketplaces, social media platforms, and future apps to be as fast and performant as their centralized predecessors.
There are a lot of projects on the market aiming to launch a full-fledged platform for dApps, social platforms for reviewing tokensales, marketplaces for promoting them (see the table below). But Menlo One is an interesting case of launching a social segment TownHall and a tokensale Marketplace based on Menlo One platform right away. This will allow users to get a full package of services to develop, distribute and promote their product within the same ecosystem.
|Project name||Menlo One|
|Type of token||utility|
|White paper||Open WhitePaper|
|Hard cap||$15 million/25,000 ETH|
|Price||1 MET = $0.000083|
|Total Cap Size||1,000,000,000 MET|
|Team||16 core members/ 8 advisers|
|ICO Dates||July 16 – August 20 2018|
|Public Sale Conditions||KYC, AML|
|Total Token Offered||300 mln|
|Presale Date||June 26th, 2018 (Minimum purchase amount $10k)|
|Public Tokensale Date||July 16th, 2018|
Menlo One offers comprehensive blockchain crowdsale solution with deal-discovery, collaboration, and asset management. All Menlo One components address the critical limitations around user experience, security, and compliance that presently stymie widespread adoption. Using a distributed database makes the platform fundamentally decentralized. Using blockchain makes the whole ecosystem stable, transparent and secure and solves security vulnerabilities of the market.
Menlo One key technology is based on:
1. A desktop native app which runs an Ethereum node and can automate pre-approved transactions. It also includes features designed specifically to improve the user experience of buying tokens such as handling KYC identification related images.
2. A Proof-of-Reputation algorithm which leverages a Token-Curated Registry design pattern to incentivize virtuous contributions and promote network growth.
3. A decentralized database which caches data from decentralized networks to provide users the speed and experience of a traditional webapp, without compromising the security guarantees of a distributed blockchain.
Menlo One ecosystem consists of 4 elements:
- TownHall (Communication layer) – “an open-source framework, which allows developers to build innovative monetized or incentivized communications platforms and projects using the Menlo software”. It’s a social platform which allows to share opinions about blockchain projects and is completely decentralized that means that there’s no way to censor critical remarks or influence from the outside on the reputation of the product or user. It’s already working can be forked and used to create software right now.
- Guilds (Governance) – TownHall users will form groups (Guilds) and then stake their reputation to earn rewards for their value from ICOs that hire them to make a professional review about the project. Guilds system will provide more accurate reviews (this expectation is based on the data of the Stanford study) and help identify and stop scammers.
- Marketplace – decentralized trading platform for tokens, that will allow users to launch ICOs, to buy tokens, to store them in Menlo One wallet. The actual marketplace itself will not be out until the end of the year.
- Core (Decentralized Database) – the central core of the entire product, which guarantees secure storage of data based on the block, while ensuring a high speed of processing and retrieving data, using a Proof-of-Reputation algorithm and the InterPlanetary File System (IPFS).
MET are “utility tokens”. Menlo Token is supposed to be the keystone of the whole system. It’s an open source ERC20 compatible token on the Ethereum public blockchain. MET will be sold so developers have a fully functional product with which to build on.
How does MET flow:
1. Projects put Menlo Tokens into a Listing Contract on Ethereum. The contract is included in the Menlo App.
2. When a User requests a profile from the Content Node (that host a web app which pulls data from IPFS and Ethereum including the Project Profile and caches in a database on a performance machine), he includes his public key in the request. In the response the SContent Node returns a digital signature. Both parties then submit their keys and data to the Projects Listing Contract.
3. If successful, both parties are paid in MET. The User is paid for their attention. The Content Node is paid for data availability.
4. The Projects Listing Contract is also a REP Granter, and gives each actor REP tokens for a successful transaction.
Users will need to get a token-curated reputation score (REP), granted by smart contracts which take signals from events in the ecosystem. Users can earn REP a number of ways, including being a top rated commenter in TownHall, voting in TownHall, being part of a Guild, and buying tokens via Menlo Wallet. Each of these systems are operated by smart contracts with Granter privileges to give REP. Content Nodes earn REP by reliably serving data over time. For example, in TownHall users will get rewards for posting, voting and commenting activity.
Blockchain is clearly needed in this project as developers will need token to build their projects on the Marketplace, and also it has to be decentralized so that it can scale and can’t be corrupted by those who control it. The idea is once it exists, nobody can take it down, and the world can use it to crowdfund reliable projects.
There is a number of similar projects that are developing fast after Ethereum introduced smart contracts for creating programs on-chain. Ethereum is the first, biggest, and most well-known dApps platform. EOS has just closed its tokensale with rather impressive results. There are also such projects as Lisk, QTUM, Cardano and NEO:
- EOS is a decentralized operating system which can support industrial-scale decentralized applications without transaction fees and high TPS.
- QTUM is a decentralized and open-source smart contracts platform and value transfer protocol which focuses on mobile dapps. QTUM integrates the best parts of the Bitcoin and Ethereum platforms into a business-friendly blockchain.
- NEO is a blockchain project “that utilizes blockchain technology and digital identity to digitize assets, to automate the management of digital assets using smart contracts, and to realize a “smart economy” with a distributed network.”
- Cardano is is a blockchain platform that provides a programmable blockchain and smart contracts for dApp development, it’s the first blockchain with peer reviewed tech and was describes as “New Ethereum” and “NEO killer”.
But Menlo One differ from them in one thing: they want to create a synergy between the social and technological aspects, protecting the application by a decentralized reputation that will allow the self-sustaining and self-cleaning ecosystem to grow high.
The project Roadmap has been developed in great detail and for each of the four main elements of the project (TownHall, Marketplace, Guilds, Core) there is a development line, including the release of trial versions, testing and debugging. The launch of the Guilds and Marketplace is scheduled for the 2nd half of 2019. Special attention in the Roadmap is paid to the technical side of the crowdsale, as well as the business development of the product. Each of these points has its own development line on the Roadmap.
Project has an experienced and strong and growing team. They added 7 members to the core part of the team during last month. They now have new CTO (David Dawson) and COO (Tiaan Wolmarans). The CMO Scott Kraft has left the team.
A special attention is paid to the blockchain part: two specialists are responsible for architecture (Dave Hoover) and blockchain development (Felix Watkins), both are in blockchain for several years and have running projects. The balance in the team is clearly biased towards development, but in June they significantly strengthened the business development department.
The CEO Mattew Nolan is a former Sr Engineer at JP Morgan and IBM, built online casinos at High5 Games and took part in several IT-startups (for example, a telecom SaaS Speek, a social discovery platform Verona). Website, Linkedin, Twitterare active<.
Project CTO David Dawson has 15 years of experience of directing engineering organizations across product & software engineers at Microsoft. Is a co-founder of Mast Mobile. He replaced Anthony Martin in this position, Anthony is now overseeing engineering processes. Linkedin profile.
The COO Tiaan Wolmarans is an entrepreneur who focuses on operations and product development and has helped several ICO to raise over $11mln and has several upcoming ICOs planned. He also worked at Hempcoin and Solaris. Linkedin profile.
The fact that Menlo One has special advisors for engineering part, product development and blockchain architecture shows team’s rational point of view. All the advisors have strong blockchain experience.
Mike Hostetler (Engineering) is a serial entrepreneur, director of blockchain at Raise, CEO of Modern Web, CTO of SuperBetter, and Project lead at jQuery and has strong experience in project development.
Elissa Shevinsky (Product) worked as Head of Product at Brave Browser, and CTO of Glimpse.
Rick Dudley (Blockchain Architect) is a founder of VulcanizeDB, worked as a blockchain Architect at Omega One, OmiseGO, ConsenSys, his experience is concentrated in software architecture.
The rest of advisors team is also highly experienced in all the areas blockchain startup might need: Richard Titus (Business), Jill Richmond (Marketing), Markus Ament (Marketing), Marissa Kim (Legal), Elissa Shevinsky (Product), Mike Hostetler (Engineering).
At the moment, the company announced a partnership with three companies: Omega One, DAOStack, ARK and Digital Asset Trade Association (DATA). These partnerships speak for project being serious and having good perspective in the future.
Omega One’s team members are core advisors at Menlo One: Rick Dudley as a blockchain architect and Richard Titus helps with business development.
Originally Menlo One was planning to use the DAOstack governance engine building an interface for ICOs, but then they have been pivoted to a broader scope and are currently reviewing plans for cooperation with DAOstack.
ARK is a team of experts in blockchain technologies that help teams to prepare the project. Menlo One CEO is currently a partner at ARK, while ARK managing partner Marissa Kim is a legal advisor of Menlo One team.
Digital Asset Trade Association (DATA) is an advocacy group for Distributed Ledger Technology that helps Menlo One with legal part of all the preparations for ICO and post-ICO period.
|Total Token Offered||300 mln of 1 bln|
|Presale Date||June 26th, 2018 (Minimum purchase amount $10k)|
|Public Tokensale Date||July 16th, 2018|
|Pegging Parity||ETH/USD/MET (1:600:12000)|
|Lockup (Presale)||Only for Bonus Tokens (90 days)|
|Lockup (advisors)||2 month lockup, then 1 year vest|
|Lockup (team)||2 month lockup, then 2 year vest|
|T1 price discount/bonus in (Private presale)||50% discount|
|T1 price discount/bonus in (Private presale)||40% discount|
|T2 price discount/bonus (Public Presale)||30% discount|
|T3 price discount/bonus (Crowdsale)||Sliding discount|
Public presale starts on July 26th, with minimum purchase amount of $10k. Those who participate in presale will get 30% token price discount. Bounty program can be joined here. There’s also a lock-up period planned for team, advisors and bonus tokens holders. These measures will provide an incentive for the team and the advisors to work on the project, rather than dumping tokens after they go to the exchange. Well, at the same time, it partly keeps tokens from a serious price drop when the token is released to the exchange.
Menlo One web site monthly audience according to SimilarWeb is 15k users.
Menlo One has a Github account with code samples available.
The project regularly appears in reviews of leading media such as The Merkle, VentureBeat and others, most of those articles are marked as “sponsored”.
The online image of the project shows that the marketing campaign of the project is in active stage: social media community has grown significantly in the last month: 12 812 subscribers in Telegram group chat and 10.9k followers in Twitter. Activity in Facebook (369 subscribers) and Bitcointalk announcement thread (27 messages) remains low.
The team greatly increased marketing activity, which is primarily due to the launch of public sales. A significant and loyal community has been assembled, it is obvious that the main attention is paid to the twitter and the telegraph, other channels of communication with users are considered as additional
The project looks rather ambitious, as it promises to provide a fully functional platform for the development of decentralized applications and systems for marketplaces that support the emerging token economy. The product is supposed to make the process so simple and secure that anyone can participate. The fact that this ecosystem will contain lots of components make it fully compatible for the growth of token based business models that require both communication and transactions.
Two important components that will be launched on the basis of the platform are the TownHall and the Marketplace, that’ll help to launch ICO or invest in a package right away.
Menlo One hardcap is $15mln which is also a good sign that demonstrate that the team estimates the project realistically and does not seek sky-high sums.
The project gives the impression of standing firmly on its feet. This is also indicated by the detailed design of roadmap for each stage of project development.
Menlo One project looks really promising and there’s quite a chance that it’ll be a success. The team looks professional, advisors’ group has very reliable background.
The idea is strong. The only question is who can be first to introduce the technology on the market and clearly convey to the user all the advantages of its approach. Thus, it is obvious that not only high-quality technologies and the impeccable reputation of the team will play a role here, but also a marketing strategy, as well as a community created by a project team that will become a self-regulatory system.
The review was provided by ICObazaar.com experts
KryptoPal – is a new SDK (software development kit) platform that will allow different dApps to make crypto payments and transactions from anywhere in the world with any cryptocurrency. KryptoPal is developing an ecosystem that will include various tools for developers who will be able to use their habitual programming language and enjoy all the advantages of the decentralized platform in non-centralized programs. KryptoPal will work for a wide variety of applications such as wallets, remittance services, payment networks, eCommerce, gaming, banking systems, etc.
Even though there has been a widespread acceptance and enthusiasm for blockchain and cryptocurrency, there are certain barriers that stop them from being accepted into everyday routine due to issues such as new technology, lack of documentation, infrastructure, and development tools. In addition to the existing problems, it restricts people from performing real-time transactions like they are currently accustomed to.
|Type of token||utility|
|White paper||Open WhitePaper|
|Hard cap||$30 million|
|Price||1 KPX = $0.4|
|Total Tokens Supply||1,000,000,000 KPX|
|Tokens for Sale||500,000,000 KPX|
|Team||6 core members/7 advisers/3 agencies|
|Public Sale Date||August 8 – October 6, 2018|
|Public Sale Conditions||KYC, AML|
The KryptoPal platform consists of a Software Development Kit (SDK), an extensible Application Programming Interface (API), the KryptoX token (KPX), and secure Smart Contracts and payment channels.
To gain access to all the benefits of the Ethereum ecosystem, a developer using a KryptoPal platform for an existing application should be able to connect to the platform. This application will be connected to other applications and will provide users with the ability to perform a wide range of transactions. Existing applications (it might be any program or device) will be easily connected to decentralized technologies and gain access to encryption of transactions and smart contracts. Another benefit is blockchain technology speed of implementation. Developers do not need extra skills to review documentation.
- Existing applications can be easily integrated into the ecosystem, their users won’t be forced to switch to a new tool.
- The project helps to implement blockchain in everyday life, simplifying technology usage and saving time for application developers.
- Creation of a unified system of transactions, that works in µRaiden network progressive network with low fees.
The KryptoPal ecosystem includes:
- Software Development Kit (SDK): can be integrated into any existing application, connects this application to Ethereum blockchain, which means global connection to other applications in the network.
- Extensible Application Programming Interface (API): The KryptoPal platform works by wrapping a set of API endpoints into easy-to-consume SDKs for developers, which will enable fully powered blockchain functions.
- KryptoX token (KPX): Platform fuel and the main element which will unlock the access to API features and transactions, will be used to cover transaction fees, as a user reward, as an instrument for instant micro transactions.
- Secure Smart Contracts: Will be easily integrated into applications allowing developers to integrate automate payments.
Payment channels: May be opened using µRaiden network. By allowing users to lock tokens on-chain and trade balance proofs in real time, these channels allow application providers to connect to their consumers and enable real-time zero-fee transactions. When either party chooses to close the channel, their balances are updated to the blockchain using the last balance proof.
KPX is a utility token. KryptoPal’s goal is to reach the majority of current and future crypto users. KryptoPal estimates crypto users will be 1% of the total population by 2022 or 2% of the total app users that exist today. With this conservative approach, 80 million KryptoPal users will be generated.
The token provides users with access to premium API features and integrates the application with mainstream applications worldwide. They help facilitate real-time micropayment channels with zero fees and reward users with tokens.
The token transactions happen on-chain in the Ethereum blockchain. The blockchain-based functionality allows users to register and provides permission for their identities. Alternatively and more securely, users may register their identity within a “User Identity registry” smart contract.
Market and competitors
The industry’s request for convenient API for cryptocurrency transactions has been around for a long time. There are a huge number of projects that have been offering the similar functionality for bitcoins for a long time already on the market (Neurowave, Tierion, Factom Alpha, Coinbase itself, Blockchain project, Bitcore, Colu, Gem, BlockCypher, ChromaWay and others), however for the ethereum-based tokens the choice is not so great. With the right approach to the issue and successful marketing, they will have the opportunity to gain a foothold in the market as a reliable tool.
The main competitors are:
- Ripple is the most known platform at the moment, which allows you to send money around the world in a quick and reliable manner. Financial companies and businesses eagerly use the token to reduce the cost of transactions.
- Coinbase is mainly a crypto wallet and crypto exchange that allows exchanging Bitcoin, Bitcoin Cash, Ethereum, and Litecoin and fiat currencies in around 32 countries.
- Raiden Network is an off-chain scaling solution, that works with any ERC20/223 compatible token, enabling fast, cheap and scalable payments. Its goal is to research a so-called “state channel” technology, define protocols and develop reference implementations.
- OmiseGO is a public Ethereum-based financial technology for mainstream digital wallets. It enables real-time, peer-to-peer value exchange and payment services across jurisdictions and organizational silos, and across both fiat money and decentralized currencies. Designed to enable financial inclusion and disrupt existing institutions, access will be made available to everyone via the OmiseGO network, SDK and digital wallet framework.
- TenX is a solution provider that allows users to convert and spend some leading cryptocurrencies through the use of a debit-like card. A cardholder can easily monitor and maintain their security settings, portfolio spending, daily spending and withdrawal limits. TenX is equipped with a banking license and debit card system that will help establish it as a payment network for the real-world to connect with the blockchain ecosystem.
- Civic offers a solution called Secure Identity Platform (SIP), that uses a verified identity for multi-factor authentication on web and mobile apps without the need for usernames or passwords.
- Infura exposes a number of API endpoints that allow applications to interface with decentralized solutions like the InterPlanetary File System (IPFS) and Ethereum full nodes.
KryptoPal is a single solution that combines the functionality of the platforms considered above into a single SDK.
The roadmap shows that the team has eagerly approached concept development of the project, since it took them almost a year to get from the idea creation in January 2017 to the first alpha versions of the product. The next step was the growth of the team, after which the development, as seen on the roadmap, significantly accelerated. Since December 2017 (launch of the test network) to March 2018 (SDK alpha), the team did a great job. However, it should be noted that since April the roadmap document has not been updated, which again can be attributed to the shortage of marketers.
Team and advisory board
Both key team members and advisors have relevant experience but do not have experience in widely known international companies. Lack of understandable international experience can be considered a disadvantage. Especially in the case of advisors, it’s always better to see some serious figures who could help the company with entering international markets and establishing connections with the largest investors.
Also, as a disadvantage, we note that the section of the team does not mention any expert software engineers who are directly involved in the development of the product, and there is no possibility to evaluate their experience of working on blockchain projects.
- Venkat Nallapati, CEO, is an experienced entrepreneur who has worked for Fortune 500 clients such as Honeywell, American Express, American Airlines, Best Western International, CIGNA, Aetna, Walmart, ING and Michelin Tires. LinkedIn profile
- Jaycen Horton, CTO is a specialist in building peer-to-peer applications by leveraging the latest in smart contract technologies and combining it with familiar yet cutting edge user experience technology. LinkedIn profile
- Jane Kanter, CRO, is a regulatory expert and has more than 35 years of experience counselling businesses about legal, regulatory and compliance matters. Most recently, Jane served as Chief Operating Officer and General Counsel of ARK Investment Management LLC, a registered investment adviser located in New York City. LinkedInprofile
- Jorge Sanchez, CMO, also works as a fellow at VentureWell and was a Digital Marketing Specialist at Spear Education. LinkedIn profile
- Camille Evans Paterson, Community Relations, is an author, app creator, digital marketer, entrepreneur and teacher specializing in communication, responsible for supporting the KryptoPal community. LinkedIn profile
- Christophe Bosquillon, Chief Economist, provides Foreign Direct Investment (FDI) decision support & strategic risk assessment to various industries & governments. LinkedIn profile
Advisors board includes 6 experts specializing in marketing, business strategy, digital and blockchain startup strategy and technology. All the advisors claim to have a long experience in the industry, have working LinkedIn profiles but their actual places of employment are either local or peripheral. Team doesn’t publish any external links to advisors’ profiles and it makes more difficult the process of information verifying.
- Jeffrey Willenbrink, Marketing Advisor, works as a self-employed marketing technologist helping clients to tune websites with digital marketing solutions for e-commerce Has a website, LinkedIn and Twitter profiles.
- Mohanned Al-Anni, Business Strategy Advisor is the Vice Chairperson/Co-Founder and COO of Gulf University in Bahrain. Has LinkedIn but no foto.
- Ravi Prasad, Digital and Blockchain Start-up Strategist. Is claimed to be the CEO of WWI, a cloud-based technology company, and is a Project Manager for Ninestars, a digital solutions company. Has no social media resources or working profile.
- Mohammad Nauman, Technology Advisor is an Engineering Director at American Express and advisors at various startups, helping them with strategic solutions to enable business growth. Has LinkedIn profile.
- Jo Lynn Clemens, CPCU, ARM, Advisor. Her experience includes CEO and Founder of XOXY, President of JJC Insurance Services, an insurance training, compliance and operational auditing company monitoring coverholders in the areas of Compliance, IT, Marketing, Accounting, Underwriting and Claims on behalf of Lloyds of London. Has LinkedIn profile.
- Anthony Scarpulla, Community Advisor, works as a CCO at Blockchain Beginners. Former Senior Crypto Strategist at Vermamedia. Has working LinkedIn profile
- Rennie Davis, Advisor. The most experienced figure at the advisor’s board. His clients have included the CEO of HBO, CEO of the Manville Corporation, officers of Time-Warner and IBM, the board of directors of Gates Rubber Company and people in the Forbes 400 Richest Has working LinkedIn profile
Team page on the project’s website mentions three agencies, who took outsourcing functions such as legal support and work on the promotion of the project:
- Reichlin Hess, Attorneys at Law, Tax Advisors, Blockchain and Crypto Projects
- TechThinq, PR & Media Firm
- KEO Marketing, Next Generation B2B Marketing
The only partnership established for now is a charity partnership with a Swiss NGO help2kids in an effort to enable donations for children in Africa.
Token distribution and token sale details
|Total Token Offered||500 mln of 1 bln|
|Token price||The price is $0.04 but will slide up during the sale depending on the whitelist position|
|Public Token sale Date||August 8, 2018|
KryptoPal pre-ICO is active since April 2018, and bounty campaign can be accessed here. KryptoPal pre-sale is for accredited investors, and the public sale is for every qualified person. Private pre-sale is currently in progress with the public main sale starting on August 8. It requires for a user to be registered, whitelisted and KYC verified in order to participate in the ICO. The team is only accepting Ethereum.
Token sale is open to all jurisdictions except USA, Canada and China. Token price will change automatically once the previous round allocation is completed. First 48 hours of public sale is open to whitelist participants only.
KryptoPal website monthly audience is not available due to lack of data at similarweb.com. Although their website domain was registered in September 2017, we can assume that either the site itself was launched recently, or its promotion is not sufficiently active and attendance figures are low.
Most of the visits are linked to referrals (70%), and about 30% come from search queries. These search requests are: project name, as well as phrases “free startfinder tokens” or “get free token”. The team also has a Github profile with low activity.
Media and community
The media activity regarding KryptoPal is quite low. There are no articles on the project itself and its technical components, but a significant increase in references was due to the fact that KryptoPal participates in a charity project in Africa.
Online image of the project shows that the marketing campaign for the project didn’t yet actively started. Social media community is small: 1,214 subscribers in Telegram group chat and 1,193 followers on Twitter. Activity in Facebook (258 subscribers) and Instagram (90 subscribers) also remains low.
We expect that the team will increase marketing activity closer to the date of public sales. However, it should be noted that such a low community activity less than 2 weeks before the public sale start looks depressing.
Risks and Potential
KryptoPal claims “to remove the barriers of mass adoption to cryptocurrency by creating a technology that would make it easier for people to use”. According to the idea of the team, KryptoPal should be a PayPal of blockchain world. Despite the ambitious aspirations, considering that the idea was created in January 2017, it is not yet clear what will allow the team to make KryptoPal a key player in the Ethereum and Ethereum-based tokens SDK market.
The project looks ambitious and will be useful for the blockchain ecosystem. However, despite the fact that the team has already launched the alpha version of SDK and the API, it is not entirely clear why the project remains unnoticed in the media field and in social media. Either this is a conscious decision of the team or a flaw. In any case, this is a serious point that might drive away investors.
The review was provided by ICObazaar.com experts
Why you should be Careful with Crypto Investment
A lot of investors do not do any background check on ICOs and other projects before investing in them. This is very risky and one of the dangerous thing anyone could do. How fraudsters use huge cryptocurrency return as a bait to steal from people is largely manifested in the report of Australian Competition and Consumer Commission indicating that AU$ 2.1 million has been stolen from Australians.
Scammers normally operate by setting up fake social media accounts pretending to be blockchain developers and famous experts. In this way, they persuade people to deposit their funds hoping to get higher returns in the future. Most of the cryptocurrency related frauds are conducted through this method.
Also, it was reported that 80% of ICOs are scams. The truth is that a lot of them, if not all of them are poorly regulated, and has no insurance for investors. The same can be said of cryptocurrency exchanges. Most of them provide no insurance for investors; meaning investors stand chances of losing the hope of recovering funds in case something happens to the platform.
According to research, most of the exchange websites were created by scammers. They target investors who do little or no review about them before sending huge amount of money to their so-called exchange.
Investing in cryptocurrency with life-saving earnings could be very dangerous as well. The volatility of the market has created a golden rule – invest the amount you can afford to lose. Just as the Dutch tulip mania crashed without notice, it is believed that Bitcoin has not proven itself enough for anyone to invest in them with life saving money.
South Korea Lawmakers Discuss ICO
South Korea has commenced an extraordinary session in the National Assembly to discuss regulation and measures to promote the cryptocurrency industry alongside ICO guidelines to eventually overturn the ongoing ban.
According to a Business Korea report on Monday, the short session – extraordinary sessions cannot exceed 30 days – in South Korea’s National Assembly will see relevant standing committees and lawmakers from parties across the political spectrum ‘discuss measures to promote the blockchain and cryptocurrency industry and create a guideline on initial coin offerings (ICOs)’.
The developments come at a time when lawmakers hasten to fast-track domestic regulations for the cryptocurrency sector with draft bills expected to be submitted during the session.
The session has seen lawmakers call on the Ministry of Science and the Information and Communications Technology (ICT) Ministry to prepare ICO guidelines for investor protections. The sessions are expected to field discussions calling for ICOs to be allowed in South Korea, with relevant investor protection safeguards in place.
As reported in May, the National Assembly’s Special Committee on the Fourth Industrial Revolution called on the government to allow domestic ICOs, accusing authorities of ‘neglecting duty’ following a sweeping, knee-jerk ICO ban that followed China’s lead nearly a year ago.
“Entrepreneurs looking to innovate should be allowed to raise funds through cryptocurrency,” Jeju Island governor Won Hee-ryong was quoted as stating in his call to allow ICOs on the island.
The session will also hear and deliberate the recent proposal from Jeju Island’s governor in seeking to create a ‘special zone’ for the blockchain and cryptocurrency sector wherein fundraising through ICOs will be permitted despite the current ban in the mainland.
Jeju Island, Korea’s most popular tourist island that sees a large number of domestic visitors, made the proposal to become a designated ‘special zone’ for the industry in a meeting with senior government figures that included Kim Dong-yeon, Korea’s finance minister, earlier this month.
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