Impak Coin ICO: The first regulatory compliant ICO in Canada
Last week several blogs and news media reported the story of Impak Coin being Canada’s first regulatory compliant ICO. We were curious about it here at Coinschedule and asked Eamon and Fançois to tell us a bit about it. Is this a blueprint for other countries?
Eamon and François, thanks for speaking to us today. You first submitted your Impak Coin ICO to Coinschedule back in June, and I guess the big news is that you are now the first fully compliant ICO running off Canada, right?
Eamon: That’s correct, Alex. We’ve finally launched the impak Coin ICO, and it’s gaining more and more momentum every day. It’s been a long road working with Canadian regulators to get things right, and we had to push back our start date a few times, but it was well worth it. We’ve succeeded in building a model for ICOs that puts investors first, and our investors were patient and understanding through the process.
How did it happen? Did you already have contacts with the regulators? Did you approach them, or did they approach you?
François: We approached them. We wanted to make sure we were on the right side of things and were willing to work with them to create a new regime for ICOs where the public was protected. impak Finance is launching an impact investment fund, and a fully digital bank that invests its deposits in the impact economy, so it’s imperative that we build strong relationships with regulators and other competent authorities. By being upfront and transparent, we established a really good and productive relationship with the AMF (the provincial regulator in Montreal, Quebec). Maybe that’s why they were able to turn around and provide us with their decision in 3 month’s time. For those who have experience working with regulators, this is lightning fast. The people at the AMF really did a stellar job on this.
How much interaction are you having with them? Do you speak every day, every week? Did you meet in person?
François: We communicated regularly, on the phone, face-to-face, via email – they’re just down the street. Mostly to understand what their requirements were and how we could satisfy them while catering to a clientele that was familiar with ICOs but unfamiliar with private placements.
Can you tell us what sorts of information the regulators are looking for?
François: Their main concern was the protection of the public. They needed to know we would do a proper KYC and suitability analysis for all investors. We needed to show them a project and system that would take into account the spirit of current securities law, and adapt it to the context of ICOs.
What was the impact of having a regulated ICO? Are you having more or less interest?
Eamon: That’s the million Bitcoin question, Alex. On one hand, going through the regulatory process has earned the confidence of a lot of investors brand new to cryptocurrency. For 46% of investors, impak Coin will be their first cryptocurrency. That figure speaks volumes, and shows the potential that working with regulators has to instill confidence in the public outside of the cryptocurrency world. On the other hand, we’ve definitely left some money on the table. For those investors requiring complete anonymity, a regulated ICO is not the best option. But coin wallets and exchanges are beginning to collect the same basic information anyway. Putting off our start date may have spooked a few investors, but we received so much positive feedback from supporters who understood what we’re trying to achieve, that on the whole, it was definitely a positive experience.
We are building impak.eco, an ecosystem of impact businesses, investors, and customers, and the success of the ecosystem requires a critical mass of active users in the system. impak Coin will be used to invest in these businesses, and spend with them. The best outcome for the health of impak.eco is to have a diverse group of investors that includes those who intend to use the token to invest and spend. Going the regulated route has helped increase the number of active users, giving us this critical mass, and also cuts down on the wrong kind of investor who has no interest in the long-term success of our ecosystem, both of which lead to the health of the ecosystem, and thus contribute to growth in the value of impak Coin.
Do you have any recommendations for others out there running or planning to run their ICO? Should everyone move to Canada?
Eamon: For potential ICOs, ask yourself what your objectives are in running an ICO. Regulation does create friction, but it also earns trust. If you want to take every possible dollar, Bitcoin and Ether that anyone will give you, then regulation isn’t for you. But if you have a legitimate project that requires capital and active users to develop, then regulation is worth the effort, and definitely cheaper than paying legal fees when regulators go after you.
For investors, ask yourself what the risks are to invest in an unregulated ICO. There’s a cloud hanging over every ICO that’s been held in a jurisdiction where regulation is unclear. If the money that has been raised in the crowdsale needs to go to legal fees to fight the SEC, then that’s money that doesn’t go to developing the project you invested in.
For impak Coin, the benefits of running an ICO in Canada were definitely worth the additional work, it has helped us to develop a stronger relationship with our community of investors, and it has cut down on the risk to investors.
From a risk/reward perspective, regulation may or may not decrease reward slightly, but it increases risk dramatically.
Eamon and François, thank you so much for your time, good luck and keep the nice work!
For more information about the Impak Coin ICO check the following link: https://www.coinschedule.com/icos/e150/impak-coin-presale.html