DNotes’ Alan Yong Looks at the ICO Side of Mobile Payments

September 11, 2018         By: Steven Anderson

The initial coin offering, ICO, is a somewhat controversial tool that’s been seen as both an opportunity for potential cryptocurrency investors and scam artists alike. Addressing these points, DNotes’ CEO Alan Yong recently offered some insight, which was sent out to us in turn. Yong’s insights herein both point out some of the problems and some potential solutions to the matter of ICOs.

Since DNotes itself recently underwent a fundraising option in accordance with Reg. D 506 (c), it puts Yong in a unique position to speak to both the benefits and the challenges. Yong referred to the ICO as “…perhaps one of the most efficient means of capital formation we’ve ever seen.” Yong additionally noted that “the ICO’s ability to enable virtually anyone in the world to invest in a project can conceivably provide greater access to opportunity for more people than any other form of investor fundraising.”

This is a good point, but Yong also notes that the ICO—like any other truly powerful tool—can be readily misused, and should prompt regulators to get involved on at least some level. After all, Yong noted, the Securities and Exchange Commission (SEC) was created in the first place to address the kind of rampant, unchecked speculation that led to the Great Depression. Yong even compared cryptocurrencies to the dot-com bubble, noting that regulators did need time to consider new technologies thoroughly.

Some here would disagree with Yong, suggesting that a laissez-faire approach is really the only approach to take. Yet with so much of the market still operating in wild-west mode—and a lot of potential buyers sitting on the sidelines because they actually believe that cryptocurrencies are basically money for criminals—getting some credibility into this market is about the only way that we’ll ever be able to see it go mainstream.

Yong is right that a certain amount of regulation is likely needed here to prevent the worst of human impulse from stepping in, but finding just what that “certain amount” is is easier said than done. Too much regulation will kill cryptocurrency as dead as too little, and going from one extreme to the other is a pretty sure recipe for failure.