Russian Blockchain Association To Launch ‘First’ Guarantee System For ICO Funding

The “first” guarantee system for Initial Coin Offering (ICO[1]) investments[2] is set to launch in Russia[3] in 2018, local media outlet Izvestia[4] reported Feb. 19.

The system, dubbed ICO-hub, is being developed by Globex[5] Bank, which is a subsidiary of state-owned Vnesheconombank[6] (VEB) bank, together with the Russian Association of Cryptocurrency and Blockchain (RACIB), and the CrowdHub[7] platform.

According to Alexander Mineev, Globex’s head of e-commerce and remote banking services development, the ICO-hub project is expected to be launched for testing in March, 2018.

For those looking to raise funds via ICO, the ICO-hub system makes it possible to accept both crypto and fiat — an escrow account[8] is opened with Globex for accepting fiat money, and a CrowdHub wallet opened for accepting cryptocurrency[9].

An escrow is a system in which a financial instrument or asset is held by a third party on behalf of two other parties that are in the process of completing a transaction.

Mikhail Lapin of consulting service Bell Integrator[10] told Izvestia that the use of escrow accounts for ICO projects would provide both parties guarantees, as well as minimize the risks of a deal breaker or fraud[11]. The head of Russian tax firm TSK countered the idea in a comment to Ivestia, pointing out the lack of a mechanism for legal protection of investors’ rights, given the current absence of legislation around cryptocurrency[12] in Russia.

Earlier this month, Russia’s Ministry of Communications published requirements[13] for those running ICOs, demanding they have at least $1.7 mln in nominal capital and a license issued by the Ministry in order to launch an ICO.