Your ICO Has Ended

May 13, 2019   Ethereum

Your ICO Has Ended - How You Can Pay Your Bills With The Proceeds

Your ICO has done well; you now have your crypto wallets stuffed full of Ether, Bitcoin and Litecoin (and whatever other currency you accepted as a swap for your own tokens). You now finally have the capital to take the idea outlined in your whitepaper and turn it into a booming (and sustainable) business.

The problem is that you can't just sell $15 million worth of cryptocurrency and drop it into a bank account and move forward with your grand scheme. If you tried this, you would probably be investigated for money laundering, fraud and a whole host of other problems.

Banking is still tiresome for crypto

The main problem you face now is finding a bank to accept your crypto and convert it into fiat currency that is currently used to grease the wheels of the financial world. Getting a bank account and financial services are much easier than before but it is still not easy, not by a long shot. This is something that you needed to look at pre-ICO. There are a variety of crypto friendly jurisdictions such as Malta, France, and Switzerland.

If you had set up in France, banks would not be allowed to discriminate based on the fact that you are a startup company that focuses on (and deals with) cryptocurrency. Their new laws, passed just last month, guarantee every startup a right to a bank account among many other things. Switzerland has similar laws and certain "Crypto Cantons" as they are called even allow paying for utilities and company fees in Bitcoin. Malta is known as a Blockchain Island and has very favorable laws for any blockchain or cryptocurrency based business.

On the other hand, if you decided to base yourself in the United States of America, things are going to get difficult. Regulations are state specific, but even then the federal authorities have made it clear that banks doing business with crypto companies are not going to be looked at favorably and will most probably face more scrutiny. China is a land unto itself, and keeping pace with the changes to regulations is a job in and of itself.

That's not even mentioning the extensive work you need to do with regards to KYC and AML regulations. Every single one of your token buyers needs to be vetted and every single contribution will need customer side SOF (Source of Funds) and SOW (Source of Wealth) documentation. This can keep you from your money for a good long time if your lawyers have not managed to do it all during the ICO.

Solutions to the problem

Once you have sorted out the banking issues, however, you are left with a few choices. The obvious choice is to take out all your money or use small amounts. The generally accepted method is to use small amounts as needed.

The most obvious way to do this is to use a digital exchange that will facilitate withdrawing the money to your linked bank account. This process is quite lengthy and needs a long time for many exchanges to do the required verification. A popular method is to take prepaid debit cards that are backed by cryptocurrency. You can get these from platforms such as Monaco, TenX and Bitwala. They are the best way to get funds to employees and to pay for services both online and offline. You can quite easily afford to pay all your rent, utilities, and other expenses with debit cards for the initial phase of your expansion.

Then again getting more of your suppliers into cryptocurrency is another option. That way you would be able to make use of P2P exchanges such as LocalBitcoins and LocalEthereum. This has the added benefit of helping the community at large.

Whatever you do decide to do – today comes with more options than before and the options are only increasing.

Author: Ali Raza for:

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