In a new interview with DCEBrief, DNotes Global, Inc. CEO Alan Yong stressed the importance of ensuring that the cryptocurrency industry works to comply with existing government regulations. He specifically addressed the controversy surrounding initial coin offerings and suggested that the industry must change the way it uses that fundraising tool if it wants to avoid additional regulations to rein in ICO excesses.
Yong, whose company recently launched its first round of fundraising through Reg. D 506 (c), praised initial coin offerings as a truly innovative and inclusive way for companies to raise capital. “I believe that they are perhaps one of the most efficient means of capital formation we’ve ever seen,” he said. “The ICO’s ability to enable virtually anyone in the world to invest in a project can conceivably provide greater access to opportunity for more people than any other form of investor fundraising.”
He noted, however, that ICOs represent new challenges for regulators tasked with protecting consumers and maintaining fair markets. Yong recounted the Depression-era origins of the Securities and Exchange Commission, and that regulatory body’s mandate to safeguard markets against the type of unregulated recklessness that helped lead to economic collapse in the late 1920s.
Mr. Yong drew parallels between the current state of the cryptocurrency industry and the early days of the internet boom, noting that regulators sometimes need time to adjust to new technologies and “determine how to deal with new and changing dynamics.” He was confident, however, that “regulation must be considered a given” since the SEC has a clear mandate to protect consumers and investors while securing fair markets and regulatory compliance.
When asked whether he believed that the government would eventually intervene to address the regulatory issues facing ICOs, Yong suggested that it was inevitable. “The only question is whether their intervention continues to be a more benign form of monitoring and guidance, with enforcement actions for bad actors,” he said, “or a more invasive approach that involves new, onerous regulations that could potentially stifle innovation and growth.
The DNotes Global CEO then explained why his company chose to forgo an initial coin offering and instead opted for a more traditional, regulated capital formation strategy. He stressed that regulatory compliance was a key concern for the company, suggesting that ongoing questions about the regulatory status of ICOs deterred him from considering that fundraising option at this time.
Yong’s company believes that its experience with the Reg. D 506 (c) fundraising path will be invaluable as DNotes Global’s long-term plans for NextGen VC come into focus. He plans to use that experience to help other fintech startups develop strategies for capital formation that satisfy regulator’s expectations. He predicted that many of today’s crypto and blockchain-related startups will invariably fail, but that there will be many that succeed.
“There are some great people with great ideas in this industry, and those ideas have the potential to transform our world,” he said. “Our vision for NextGen VC includes partnerships with those innovators. When we identify companies that possess vision similar to ours, we want to work with them to help them succeed.”
Yong was optimistic that ICOs could be part of that path to success, but only if they adapt to satisfy the SEC and regulators around the world. “ICOs are too effective to just abandon them altogether,” he said. “But they will need to be properly registered to avoid running into problems with the regulators.
To read the full interview: https://dcebrief.com/in-interview-alan-yong-addresses-icos-nextgen-vc-and-regulatory-compliance/