The cryptocurrency industry came to be in 2009 with the advent of the now legendary asset Bitcoin. Since then, with nearly ten years passing, the industry has seen immense growth and thousands of new assets come into existence. Furthermore, the industry minted millionaires and even a few billionaires. This had led many new entrants into the crypto space, seeking wealth and glory from their own token creation. The industry also has become plagued with employers seeking to hire employees or freelancers to do the bulk of the work for them. Many of these “companies” have not properly prepared for the creation of a new asset and thus have turned to compensate their staff with tokens yet to be created and frankly unlikely to ever be worth anything more than a notch in user’s Ethereum wallets. Perhaps apt to a startup with equity payment, except many of these digital assets have companies which the founder will hold nearly exclusive equity in while only distributing compensation to workers in the form of their token. This has led to literally hundreds of different projects which find it acceptable to compensate workers with nothing more than a naively hopeful promise that their asset will become valuable in the future. This is not only unethical but also unsustainable even for the cryptocurrency economy. Let’s take a look at a better solution in which perhaps these asset generating companies can lean upon.
The Securities and Exchange Commission, commonly known as the SEC has placed a few unclear guidelines upon the nascent cryptocurrency space. The commission would be better serving the general public with clear guidelines as to how these assets, companies, and entrepreneurs can operate in the cryptocurrency industry. Still, they have prosecuted a few companies who completed obvious scams, in an attempt to rein in the wild west nature of the industry. Through this though, many companies continue to blatantly operate with disregard for regulatory landscape. Furthermore, our team has seen firsthand (although specific companies will remain unnamed for liability concerns) the lack of respect for the rule of law and frankly any sort of moral underlining their operations. A founder may seed the notion that they’ve consulted with legal counsel and their asset-to-be is within the regulatory guidelines. In reality, the legal counsel they sought simply isn’t working on their behalf and were clearly noting that they cannot assist with the creation of an illegal asset.
Furthermore, the number of complete scams in the cryptocurrency space seems to be steadily increasing. Companies will claim they are going to create an asset for their investors and then once the initial coin offering is over the company simply disappears. Even more disgusting is the practice of hiding one’s real identity while generating a token sale. Our team has seen this first hand and now completes a strict review process before accepting new clients whom may be apt to conduct a scam initial coin offering.
The best solution to this problem lies in further regulation. The industry needs a regulatory body to step up and generate clear guidelines for initial coin offerings while promoting the innovative nature of this new asset class. What are you thoughts on this topic? We’d love to hear from you with a comment below!
Until Next time,