Can Your Business Benefit from the Cryptocurrency Trend?

There are certain rules we advise you to follow if you or your business intend in crypto trading. If you are already trading in cryptocurrency, it is vital to heavily guard your private key (or PIN). It is advised that this key must exclusively be used for cryptocurrency transactions and should not be a replica of your other PINs. It is likely for most people to opt out for using a virtual wallet. It is vital to encrypt this wallet with a strong PIN or even consider ‘cold storage’ options which simply mean keeping your wallet offline.

A rather stronger option is to use a ‘multi signature’ vault offered by exchanges; this means that the key is controlled partially by multiple people. As a result of this vault, if one of the controllers decide to undertake a transaction, others also need to sign into this transaction. However, while exchanges provide this commodity, it must be remembered that it is not their main business to provide security. Unfortunately, the brief history of crypto trading shows multiple corrupt exchanges terminating business and disappearing with client funds. Based on this, if you are purchasing crypto from an intermediary, we advise you to move your currency to a safe and secure wallet of your own.

The European Central Bank asserts that Bitcoin and other digital currencies tend to be high risk assets due to their volatile nature and relative unpredictability. There exist no global regulatory mechanism and no central origin such as a central bank. Due to the mostly unregulated nature (although EU and individual countries are starting to impose regulations), unpredictable market values and the risk of getting outlawed, cryptocurrencies are regarded as high-risk investments in the long run. Furthermore, because there is no financial institution backing the crypto trading, conservative investors and trade tend to refrain from investing into these innovative funds. On the other hand, while the past of the cryptocurrency go back about a decade only, there is a rising popularity trend for the crypto to replace traditional currencies (i.e fiat money) among novelist business people

It is known that well-established private companies are allowed to carry out IPO’s, meaning that they can provide a public offering of shares. Carrying out IPO’s can be a long process due to legal and procedural compliance issues. The most prominent example to this would be the drafting of a prospectus, the legal declaration of intention to issue shares to the public giving information about the company to potential investors. With the same logic but via much simpler methods, a company can carry out ICO i.e initial coin offering. ICO’s do not require an IPO standard legal protocol to be carried out. ICO is a way of creating digital tokens on a blockchain that is distributed through a public ledger. Via ICO, early investors, entrepreneurial establishments and newly established businesses can raise capital and have the opportunity to expand their business. In a way, businesses can offer cryptocurrencies as assets. Through every money input or investment, makers of the ICO share a portion of their total supply for the investors to benefit, in a way as a thank-you gift for the investors. And how does this benefit the investors? Just the way IPO’s offer dividends from profits, ICO’s offer tokens at a price which will inevitably rise as the public increases the investment, strengthening the standing of the company. Some ICO’s can provide massive returns for the investors while others may not and may even turn out to be fraud.

You can think of ICO tokens an alternative to stocks at the exchange market. However there is a difference in ownership between these concepts; while a stock grants ownership, cryptocurrency does not. We can say that that ICO tokens are a derivative of stocks. Conclusively, when purchasing an ICO, one must not think that they own a share of the respective company. If you intend to offer ICO from your business, the process is simple; you need to create a digital currency, a ‘wallet’ and have a basic comprehension of how crypto trading and exchanges work. The business wishing to raise money by ICO should create an outline of its business project called a whitepaper, informing investors on what they offer and how they can invest. The investors will be able to buy the ICO tokens with digital or fiat money. Normally, if the money raised through investors is not enough to kick start the company, the ICO is deemed a failure and the money must be returned to the investors. This is where risk comes in as the entrepreneurs can just as easily vanish with the investors’ money.

As all types of innovative investment, it is a risk and difficult to predict the future of the asset. Another benefit of the ICO’s is the global coverage. Normally, if you want to invest in a foreign company, you need follow the required legal procedure. The only thing you must have to invest in ICO in a different country is access to internet. The trade and maintenance of ICO’s is the same with the method explained at the beginning of this article.

HOW we Can Assist

• Legal support for IPO and ICO procedures;

• Formation of companies for ICO;

• Counselling companies on cryptocurrency investment and asset dealing.

• Legal advice to offer cryptocurrency exchange services and acquisition of cryptocurrency.

• Legal advice on the regulatory framework of TRNC and Republic of Cyprus.

• Advice on Data Protection

• Advice on tax

• Advice on policies for corporate compliance

• Advice on anti-money laundering and banking laws and regulations governing TRNC and the Republic of Cyprus.

• Drafting of shareholders’ agreement between beneficiaries

• Drafting and establishing Trusts for beneficiaries

• Advice on issuing ICO and utilizing blockchain for businesses.