- Kraken partners with Legion to introduce token sales similar to ICOs.
- Over 15 million Kraken users worldwide will gain access to these token opportunities.
- This move signals a potential resurgence of token sales amidst a more relaxed regulatory environment in the US.
A new era of initial coin offerings, reimagined, is potentially emerging.
Legion, a platform specializing in on-chain fundraising, is expanding its reach by integrating its services directly with the Kraken crypto exchange, offering token sales to a significantly larger audience.
Through this collaboration, crypto projects launching tokens can selectively target investors based on criteria like on-chain data, social media engagement, and contributions to open-source projects on platforms like GitHub.
Following the ICO boom of 2017-2018, which saw over 2,000 projects raise approximately $13 billion, ICOs acquired a less-than-stellar reputation.
The reason?
The ease and speed of launching ICOs, along with minimal entry barriers, made them vulnerable to scams. Estimates suggest that at least $1.3 billion was lost due to fraudulent ICOs, according to a report by Statis Group.
Legion aims to address these issues through “Legion Scores,” a system for evaluating and selecting potential investors, designed to filter out bots and unscrupulous actors.
Fabrizio Giabardo, co-founder of Legion, stated, “Legion Scores create a fairer landscape for everyone. The size of your crypto holdings is less important than your contributions to the industry or the project itself.”
A portion of project tokens will be available for purchase on Kraken on a first-come, first-served basis for the exchange’s user base. These tokens will then be promptly listed on Kraken, which serves over 15 million users globally.
Giabardo elaborated, “As the saying goes: ‘First-time founders are focused on the product, while second-time founders prioritize distribution.’ We are confident in Legion’s capabilities, and this partnership allows us to expand its reach significantly.”
Details regarding the first token sale offered through this partnership are yet to be released, but an announcement is expected soon.
In August, Kraken joined VanEck and Brevan Howard Digital in a $5 million investment round for Legion.
Legion’s recent growth illustrates the evolving dynamics of the cryptocurrency space.
ICO Revival?
Initially, ICOs provided a highly effective fundraising mechanism for crypto ventures, enabling them to amass significant capital quickly.
EOS, a project intended to rival Ethereum, raised over $4.2 billion in 2018, marking the largest ICO in the history of the crypto industry.
However, the US Securities and Exchange Commission (SEC) soon began to scrutinize these offerings more closely.
Yet, industry leaders like Maple Finance’s CEO, Sid Powell, have suggested that ICOs could return, albeit in a more responsible form, ensuring past mistakes are avoided.
Powell stated in December, speaking to DL News, “ICOs have matured. The previous practice of simply sending ETH to an address based on a white paper is unlikely to return. The overall environment is also significantly different than it was in 2017.”
Indeed, the current US administration has taken steps to reduce regulatory burdens on the crypto sector, contributing to new peaks for leading cryptocurrencies, including Bitcoin and Ethereum.
This has opened doors for new ICOs.
In June, Plasma, a blockchain focused on stablecoins scheduled to launch soon, raised $500 million in just five minutes through such a sale.
The Legion founders hope to retain the advantages of ICOs – rapid fundraising from a global pool of investors – while mitigating the drawbacks, such as projects mismanaging funds raised for ongoing development.
Improving Market Integrity
As part of the Legion onboarding process, projects planning to conduct a token sale must provide a white paper compliant with Europe’s stringent Markets in Crypto-Assets (MiCA) regulations.
Giabardo told DL News, “Our aim is to address the issues within the existing market structure by ensuring transparency and disclosure are the norm, not the exception.”
“We want to minimize information asymmetry and empower individuals to make informed participation decisions.”
Liam Kelly is a DeFi Correspondent at DL News. Got a tip? Email at
liam@dlnews.com.