A new 'London Fundraising Token Manifesto' created by Professor Michael Mainelli's Z/Yen Group is being launched today (23 October) with the backing of the Long Finance community. The Manifesto is a voluntary code of conduct which has been created in collaboration with finance industry and blockchain technology leaders. It seeks to establish new standards for Initial Coin Offerings (ICO) and Initial Token Offerings (ITO), the fundraising mediums that allow investors to back companies using cryptocurrency.
In recent months, numerous ICOs/ITOs have been attacked by regulatory and financial bodies across the world after a number of illegitimate fundraising rounds defrauded uninformed retail investors. This has resulted in a degree of lost confidence in the new medium and, in some locales, it has meant that ICOs/ITOs have been banned outright.
To address this issue, the London Fundraising Token Manifesto has been modelled on the Chartered Institute of Investment & Securities Code of Conduct which includes eight principles including honesty, integrity, and fairness when dealing with consumers.
Professor Michael Mainelli, lead author of the manifesto, said: "Those of us in the Long Finance movement who are excited about the technology equally look to the long-term over the short. Corporate ethical frameworks and professional codes of conduct matter. Over time, 'meum fidem, meum pactum', 'my word is my bond', prevails. This proto-bubble needs a strong dose of self-regulation and we hope our manifesto is not-so-token, but leads to real behaviour change."
Antony Abell, a signatory to the manifesto and co-founder of blockchain applications company TrustMe, commented: "The lack of confidence in Initial Coin Offerings and Initial Token Offerings is of growing concern to finance professionals who are keen to uphold standards in the City. Legitimate companies who have a genuine product offering and wish to access this new, more agile form of fundraising, have suffered at the expense of unscrupulous firms."
"A high standard of transparency, clarity and integrity are imperative requirements for the ICO/ITO industry to create a sustainable model that facilitates the rapid fundraising needed for fast-growth technology firms in a globally competitive marketplace. This must sit alongside an implicit agreement with investors to provide the information and necessary process that will create increasing trust in the integrity of ICOs/ITOs," Abel added.
"The City of London's financial procedures are looked upon by many across the world as a 'gold-standard' to aspire to. This new area is one in which the finance industry can work together with regulators and investors to champion the best elements of ICO/ITO fundraising process, cementing London and the UK as a leading destination for the latest cohort of disruptive start-ups," he said.