Author: Jonathan W. Hugg

I recently attended the American Bar Association’s annual institute on blockchain technology, digital currency, and ICOs (initial coin offerings). Some might view these new technologies as libertarian, even revolutionary. Others might call it anarchy with hype reminiscent of the dot-com bubble. For attorneys, it is crucial to understand the commercial potential of these new tools if we are to properly advise clients about safely conducting business and limiting liability and risk. We may also face possible ethical responsibilities, as the chairman of the Securities and Exchange Commission (SE”) has called on attorneys to act as gatekeepers to maintain “high professional standards” in this developing field.

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There has been increasing interest in initial coin offering/token sale/token generation events (ICO) in Australia this year. Below we set out 5 key areas and recent developments you should be aware of if you are considering running an ICO/token sale.

Read more: So you want to run an Initial Coin Offering/Token Sale in Australia…


Author: Adam Killip

At DQ, we are seeing a large number of enquiries from financial technology (Fintech) start-ups and entrepreneurs seeking to use the Isle of Man to launch digital token projects, by selling digital tokens or coins to investors. These relatively new methods of raising finance are commonly referred to as ‘token sales’ or ‘initial coin offerings’ (‘ICOs’) and effectively represent a new method of crowdfunding start-up projects and new business ventures using distributed ledger technology such as Blockchain or Ethereum.
The Isle of Man represents a very attractive choice for anyone looking to raise capital via a sale of digital tokens, for a number of reasons.

Firstly, the Isle of Man Government wants to encourage quality new business on the Island in this relatively new industry. A representative from the Department of Economic Development (soon to be re-named the Department for Enterprise), which is responsible for attracting inward investment to the Island, has publically stated that the Department is keen to attract reputable Fintech businesses to the Island (as reported recently on industry websites Bitcoin.com and Coindesk.com)

Read more: A token of appreciation – why the Isle of Man is at the forefront of the digital asset revolution


Author: Michael Bacina - Partner, Piper Alderman

2017 was a stellar year for cryptocurrency valuations in general and Bitcoin in particular. On 1 January 2017 the USD$ value of a Bitcoin passed USD$1,000 and one year later on 1 January 2018 the price was USD$13,700.

On 17 December 2017, Bitcoin reached an all time high price of $19,783.

But it hasn’t been plain sailing for the crypto ecosystem with a number of security breaches and exploits in 2017 showing how vulnerable operations can be to malicious actors.

The total value these hacks and fails on 1 January 2018 prices is just shy of USD$1 billion, an eye-watering USD$978M.

Amid all the excitement of prices soaring, the opportunity cost of cryptocurrency theft is significant and it is worth looking back over the following multimillion dollar hacks and failures as we go into the new year.

Read more: $1B lost: the 5 biggest cryptocurrency fails of 2017


Author: Michael Bacina - Partner, Piper Alderman

So what’s new?

1. Many ICOs are managed investment schemes

ASIC has emphasised that ICOs and cryptocurrency may be financial products in its recent update to information sheet 225 (INFO225). On 3 May 2018, ASIC updated its INFO225 which provides a timely reminder that ICOs may be managed investment schemes that require disclosure documents under the Corporations Act 2001 (Cth). The definition of “managed investment scheme” is quite broad in Australia and any rights described in the whitepaper that may arise in the future or on a contingency will be considered by ASIC when determining if an ICO is a managed investment scheme, shares, derivative or non-cash payment facility.

In early May, Australian betting platform Neds discontinued their ICO after the Australian Newspaper reported that ASIC considered Neds to be offering securities without complying with Chapter 6D of the Corporations Act and their whitepaper was potentially misleading and deceptive. Neds was looking to raise over $55 million in an ICO and promised that NedsCoin holders would receive a percentage of revenue each year. Clearly the features of this token indicated that the ICO was an offer of securities.

Read more: Top 5 must know ICO regulatory updates in Australia