16 ICOs have launched a self-governance initiative called Project Transparency to improve disclosure within the blockchain space, trustnodes is told in a press release.
The project is led by Santiment, which has confirmed it will provide funding and manpower to process applications and keep the initiative staffed.
Participants in the initiative are voluntarily binding themselves to disclose wallets controlled by a project and to provide a voluntary explanation of any expenditure greater than 0.5% of the funds collected.
With Aragon, Cofound.it, District0x, Encrypgen, Etherisc, Hcash, Iconomi, Indorse, Lykke, Dappbase, GATCOIN, IconiqLab, Virgil Capital, Musiconomi and Maecenas, taking part. Representing $650 million in market cap.
Any blockchain project can take part, we are told, as long as they “disclose the wallets controlled, funds held and explain any expenditures over 0.5% of the funds raised.” Maksim Balashevich, CEO and Founder of Santiment, said:
“With the rapid rise of digital currencies and proliferation of ICOs, investors increasingly want security regarding their funds and transparency on how they are administered.
Santiment was developed to provide insight and transparency to investors looking to enter illiquid and highly volatile markets, Project Transparency affirms our commitment to improving governance in the Blockchain sector.”
This is the first live self-governance initiative in the blockchain space following greater regulatory scrutiny and increased demand by investors for higher levels of disclosure. Santiment says:
“The evolution of next generation levels of transparency is important as it matures and continues its journey towards self governance in the tokenized economy.
Taiyang Zhang CEO of pre-ICO project Dappbase, and GATCOIN’s Simon Cheong explained that their support for Project Transparency stemmed from their imminent funding goals and the investor interest for this voluntary disclosure: “transparency drives better, sustainable business. And that’s what we want.”
Santiment is a new start-up which raised $11 million back in July to provide the blockchain space with a Bloomberg like terminal, analyzing data and movements so that traders can be better informed.
The initiative appears to be part of their own business, while also likely aiding the wider blockchain space, so providing users with better information regarding their invested funds.
But it appears to be limited, in some ways, requiring disclosure of only expenditure over 0.5% of funds, which for some projects can mean expenditure as high as $1 million doesn’t need to be disclosed.
Moreover, it is unclear at this stage whether there is any evidentiary requirement to show funds were actually spent for what the project says, or whether primarily reliance is solely based upon their own statement.
However, although limited, this is a welcomed step towards higher levels of professionalism through voluntarily binding commitments which have the added aspects of meeting some legal requirements, thus potentially addressing regulators concerns.
That’s the case especially if the initiative is expanded to include somewhat vetted disclosures of prospectuses as well as quarterly reports. After which, compliance with current laws to a reasonable extent can strongly be argued, thus potentially striking the right balance between promoting innovation while preventing fraud.