Indiegogo ICO Model Raises $5.2 Million But Cancels Its First ICO Due To Regulatory Concerns
After Raising $5.2 Million, Indiegogo Cancels Its First ICO Due To Regulatory Concerns
Indiegogo, one of the biggest crowdfunding platforms have been discreetly erasing their first listed ICO from their memory.
In an email sent out in July, Indiegogo’s token brokerage partner, MicroVentures, informed investors they will not be receiving tokens – but refunds instead. From the looks of it, the reason for issuing refunds are recent changes in regulation.
That ICO, a utility token offering from the Fan-Controlled Football League (FCFL), had raised more than $5 million in Dec. 2017 to fund the development of an independent football league that crowdsources team management, giving fans control of personnel decisions, logo design, and even play-calling. In addition to surpassing its $5 million funding target, FCFL inked a two-year deal with streaming service Twitch to broadcast games live.
Given below are parts of the letter the investor received:
“Thank you for participating in the FCFL pre-sale. If you have been following the crypto and ICO markets for the last 6 months you already know that the regulatory environment has been rapidly changing. The SEC has provided multiple comments regarding security and utility tokens but has not provided formal guidance or a compliant framework on how to conduct these offerings. While we believe the initial path taken was compliant, we have decided the best way to ensure compliance is to unwind the investment opportunity and return investor capital.”
Notably, at the start of August 2018, FCFL issued a blog post stating that it has decided to delay its public ICO until the company has released a fully-functional platform to demonstrate to regulators that its tokens truly have utility and are not speculative investments.
The official statement said:
“After many, many hours spent with our legal counsel and advisors we decided that the best course of action was to delay our FAN Token generation event (TGE) until the launch of a fully completed FCFL platform with which the FAN Tokens can interact with utility function.”
The withdrawal of the FCFL ICO proposes problems about the future of Indiegogo’s nascent token sale listing service. The addition of STOs had originally seemed to signify an expansion of the company’s ICO service, one that would enable accredited investors with the ability to purchase tokenized equity in associated companies.
Earlier this week, Indiegogo began its second-ever initial coin offering (ICO), this time hosting a security token offering (STO) for a luxury resort in Aspen. At the moment, the firm is working together with a brokerage startup company called Templum to offer the option to also release security tokens for their companies.
These securities will be Aspen Coins, securities which can be acquired for the first time directly via Indiegogo.
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