Russia to Launch ICO Escrow Funding System

Russia to launch ICO escrow funding system testing this March. The ICO investment system will enable ICO fundraisers to accept both fair and cryptocurrency.

21 February, AtoZForex Russia will launch “first” guarantee system for the Initial Coin Offering (ICO) investments in 2018, according to the local news reports. The system is now under the development.

Russia to Launch ICO Escrow Funding System

The organizations that are taking part in bringing this idea to life are the Globex Bank and the Russian Association of Cryptocurrency and Blockchain (RACIB), along with the CrowdHub platform. Globex bank is a subsidiary of the government-owned Vnesheconombank (VEB) bank.

The head of e-commerce and remote banking services development, Alexander Mineev stated that the ICO-hub will be launched for testing as soon as March 2018.

What is the use of Russian ICO-hub?

This innovative project looks into enabling ICO fundraisers to accept both fair and cryptocurrency. An escrow account will be opened with Globex for the fiat money transactions, while the CrowdHub will handle the cryptocurrency payments.

An escrow is a special system, where a financial instrument or asset is in the possession of a third party on behalf of two other parties that are involved in the transaction.

Russia ICO Licensing 

Some of the local media reports quote Mikhail Lapin of consulting firm Bell Integrator saying that the use of escrow accounts for the ICO projects can provide both parties guarantees. Moreover, it can decrease the risks of a deal breaker or fraud, according to Lapin.

Earlier this month, the Ministry of Communications and Mass Media in Russia (Minkomsvyaz) has published a document outlining the licensing guidelines for the initial coin offering (ICO) projects.

Reportedly, one of the requirements that are established for the digital token issuers is a nominal capital of about 100 million rubles (approximately $1.7 million). Moreover, the issuers of ICO tokens need to have a license for development, issuance, and production of the tokens. In addition, token issuers need to possess a specifically licensed bank account.

The document further notes that the ICO license will be granted by Minkomsvyaz for a period of 5 years. In the document, the authority defines a digital token as an “encrypted record in a distributed ledger technology (DLT) system which certifies the token’s owner’s right to obtain the initial price of the token from the token’s issuer via a DLT system.”

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