As ICOs keeps growing in popularity amongst investors, the need for regulatory measures increases.  COBINHOOD aims to find that middle ground.

Let’s face it, there is a bit of a wild west out there with ICOs popping up on a regular basis, with no proper guidance for inexperienced investors to protect them from fraud.
Some of the fraudulent activities around ICOs has drawn the attention of governmental agencies like the SEC (Securities and Exchange Commission), to determine if tokens should be regarded as securities and therefore represent shares in a business.

Following the SECs remarks, several stock exchanges is now working on trading platforms for tokenised securities, with Overstock’s new ATS being the first of its kind that’s both regulated by the SEC and the FINRA (Financial Industry Regulatory Authority).

But most ICO organizations have made efforts to avoid having their tokens categorized as securities, and for good reason.

• The restrictive nature of securities laws prevent tokens from being traded freely on the secondary market, which limits the network load that’s often critical for improving the coins usability over time.

• The lower volume would also limit the liquidity provided by the free market.

• Smaller companies that lacks the financial means to guarantee returns for investors will have a hard time raising funds through SEC regulated exchanges.

• Considering the volatile nature of cryptocurrencies, it could be devastating for a token issuer if its shareholders instigates private litigation to receive monetary damages, or a rescission of the sale if the price goes below ICO price.

But there is one company out there with a different take on ICO regulation..

COBINHOOD is a next generation exchange platform for cryptocurrencies that offers a underwriting service for ICOs, where COBINHOOD works as a regulatory authority.
They have an experienced team consisting of programmers, software engineers, financial and legal advisors that will provide a complete overhaul of the ICO:

Due diligence
To make sure that the ICO is a reliable investment, they will review the company behind it based on a number of factors, such as project feasibility, idea novelty, financial justification, and legal compliance.

Smart Contract Code Review
It’s important to make sure there are no flaws within the smart contract where investors sends their funds to avoid possible thefts by hackers.
They will review the code to eliminate any existing bugs, errors or backdoors.

Legal Compliance
COBINHOOD’s own ICO is a testament to their knowledge of securities laws, as their COB token passes The Howey Test, and is therefore not classified as a security. The same review will be applied during the underwriting process to make sure that the ICO token doesn’t violate any SEC regulations, and keeps the advantages of being a utility or a cryptocurrency.

COBINHOOD is building an ecosystem based on trust between investors and ICOs, rather than confine it to a pile of laws and regulations.
If they succeed, they could stand as an example for others to follow, and finally give the crypto market the integrity it so desperately needs.

www.cobinhood.com
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