What is a soft cap?

The soft cap is the capital amount gathered at which the crowdsale event will be considered successful.It is the minimal amount of funds needed and aimed at by the project to proceed as planned. Most of the projects reach their soft caps because an Initial Coin Offering is currently one of the best ways to kick start a project and to raise capital.

For investors it is important that the soft and the hard cap are based on numbers and real plans. Transparent projects are the one who build the most trust with their community.

What is a Hard Cap?

The hard cap of an ICO means the maximum amount of capital that it aims to gather.If a project doesn’t return the funds gathered over the hard cap it is often a big red flag for investors that they should keep in mind. The hard cap is pretty important because of scarcity which is one of the most important factors for the value of cryptocurrencies. Supply and demand is the main price driving correlation.

Where can I buy ETH?

There are various exchanges that sell Ethereum for fiat or cryptocurrency. For example, the following: Coinbase, Poloniex, Kraken, Bitstamp, Bitfinex, Bittrex, Cex.io Please send your purchased ETH to a compatible wallet whose private keys you own and control, before sending to the ICO.

Are ICOs legal in the US?

In early August of 2017 the SEC made it clear that in most cases Initial Coin Offerings are considered by the SEC to be securities transactions, so the existing body of SEC regulations apply fully to them. This announcement by the SEC reduced uncertainty for US entrepreneurs planning ICOs but presents them with the challenge of figuring out how to make their ICO conform to the SEC securities regulations.

Why ICO is attractive for investors?

By purchasing tokens offered by ICO, investors will primarily:

  • use tokens and receive services at a lower price;
  • receive benefit from selling tokens at a higher price in the future.

What are the legal features of ICO?

Regulation of ICO can be characterized by the following features:

  • Absence of a uniform legal mechanism of regulation;
  • Great problems with opening a bank account for a project;
  • Selection of a jurisdiction depends on a planned type of activity, turnover of a project;
  • Detailed elaboration and compilation of a project documentation and a company on which behalf it is implemented are required;
  • Technical component of a project must comply with legal requirements;
  • Lack of comprehensive, pronounced, specific judicial practice, allowing to unequivocally interpret negative consequences for ICO project in a jurisdiction.

Which jurisdiction is better to establish a company for ICO?

A number of states, especially the United States, recognize tokens issued during ICO process as securities (referring to criterion for determining investment contracts identified in the case Howey v. Securities and Exchange Commission (1946). There are a number of means, allowing to reduce risks:

  • It is possible to issue tokens as a utility, service or license, and not as means of passive income.
  • It is possible to make own investors work – perform calculations, report information, etc.
  • If receiving revenue from a token is due to commission of any useful actions by investor (for example, voting), then third condition of Howey test will not apply. Practice differs from state to state in the United States.
  • Eliminate possibility of investments from US citizens, citizens of Singapore and a number of other countries in project documentation in addition to technical restrictions (protection from VPN users).

What is the current law on Australian Crypto Exchanges and Crypto Brokers?

 On 07 DEC 2017 Australian Parliament passed the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 (Amendment Act); which expands legislation to now include digital currency exchange providers. This regulation will be in the form of mandatory registration of the exchange and compliance reporting obligations about their clients, including:

       – Customer identification and due diligence (aggressive KYC)
– Adopt and maintain a proactive AML/CTF program
– Suspicious matter and/or threshold transaction reporting
– General record-keeping requirements

      – Unregistered Exchange operators can face up to 7 years imprisonment and/or $300k fine

The current time lines for Crypto Exchange proposed regulation are:

      – 13 DEC 2017 – Royal Assent was granted

      – 16 JAN 2018 –  AUSTRAC publishes Draft Rules for public consultation
– 13 FEB 2018 – AUSTRAC Draft Rules public consultation period closes
– 01 APR 2018 – Changes (law) come into effect on this date of Proclamation

Coinstation will assess its options, to determine if it is viable to continue to operate in Australia, or if it is to follow the lead of others and move operations offshore. There is no question that Coinstation will follow the law in the territory it operates and is registered in, however, we can not make a determination on our business model until the proposed regulations and requirements for Crypto Exchange Operators and Crypto Brokers in Australia are released and made clear.

We hope Digital Currency will not be formally regulated in Australia, we hope that common sense is used and that AML/CTF threats are not going to be barriers or justifications as to why teenagers or highschool kids can’t buy a few coins, however we will always comply with the law, even where we personally don’t agree with the imperialistic nature of the policy makers.

What payment methods do you accept?

We accept payment through BTC, ETH only.