White Papers – Best & Worst Practices
Today with the millions of ICO’s flooding the market it bears to know which ones are legit in delivering to the investment world a real worth for their money. Too many behind the creation of an ICO’s are out to get real rich, real fast, without one thought of the investors participation except to get their money and then disappearing just as fast.
The good ICO’s have a valid purpose to serve and deliver upon a function that benefits a commercial use, cutting away the red tape and making a process run smoother and faster such as in banking, government, hospitals, insurance, tech co., law enforcement etc., and your receiving a profitable ROI for your participation in the long run.
What are ICOs and Whitepapers?
Investopedia describes an ICO as:
“An unregulated means means by which funds are raised for a new cryptocurrency venture. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks.”
Every crook worth their grain of salt will in the background take the necessary steps to camouflage their intentions to appear transparent an unapproachable in presenting the necessary “White Paper.” Knowing that the ‘novice investor’ will only look and not necessarily read it’s contents and if read may very well – not know what it, is they are reading. “As a token-purchaser, reading white papers is important because it can act as a signal to inform whether a startup is legit or not.”
A disclaimer may and should be included. The crooks know this; therefore so should you. (Example):
“This document is not an offer of securities or a collective investment scheme, nor does it require registration with or approval from the Monetary Authority of Singapore. Contributors are advised to read this document carefully in full, and perform due diligence.”
This is where your due diligence becomes invaluable. If you must, then take the White Paper to a Tax Attorney and ask their advice on whether the ICO is legitimate or not. However, read it yourself to become familiar with what should and should not be in the white paper.