Crowdfunding giant Indiegogo has reportedly called off the Initial Coin Offering (ICO) hosted on its platform citing regulatory concerns. It has also refunded all investors who participated in the company’s first-ever initial coin offering.
Just last week, Indiegogo listed a real estate STO campaign, offering accredited investors shares in a real estate-backed digital token Aspen Coin. The firm has said that the latest token offering is compliant with U.S Securities and Exchanges Commission (SEC) requirements.
The offering was being launched as a security token offering (STO) and hoped to raise $18 million from investors who buy into the luxury resort in St. Regis Aspen.
However, it is has emerged that the company quietly canceled the first coin offering, something that had been on the cards for a while at least.
Indiegogo’s first ICO listing – FCFL
Indiegogo’s first ICO listing was a utility token offering for a project called Fan-Controlled Football League (FCFL). The fundraising giant managed to raise over $5 million for the project from investors in December 2017.
At the time of the ICO, Indiegogo indicated that it had employed very strict standards in the vetting process and that it had complied with all legal requirements.
Details showed that the funds would be used to develop an independent football league.
The FCFL was said to be completely independent, unlike many other football leagues in the market. The management teams would be crowd-sourced and fans would exercise control over personnel, logo designs, and play.
All seemed to have gone well and the overall report was that the ICO was successful. Indiegogo announced at the time that it had surpassed its $5 million cap.
The project’s team even signed a high profile deal with Twitch, a streaming service that would have broadcast FCFL games live.
But that appears all that there is for the project, and regulatory concerns have forced the crowdfunding company to proceed with the cancellation of the ICO.
According to a report, FCFL, the issuer, decided to cancel the offering and ordered its partner, MicroVentures, to refund investors. The firm had not distributed any of the funds raised during the December ICO.
In short, the email let the investors know that the firm would refund all those who contributed during the token offering.
Part of the email to the investors says:
“If you have been following the crypto and ICO markets for the last 6 months you already know that the regulatory environment has been rapidly changing.”
The letter then details that as the regulatory environment changed, the firm did not distribute any of the investments to the FCFL.
The MicroVentures letter continues to state that the decision not to distribute the funds was taken to ensure that the firm navigated the tricky regulatory climate before proceeding with the final stages of the offering.
“While we believe the initial path taken was compliant, we have decided the best way to ensure compliance is to unwind the investment opportunity and return investor capital.”
Done and dusted
Although the refund proceeded quietly, it appears that that chapter is closed for now. According to a statement by FCFL, MicroVentures initiated the refund with its (FCFL’s) approval after FCFL ordered the ICO to be canceled.
Furthermore, it says that it wasn’t given any ‘valid reason’ by the brokerage firm as to why the token offering process could not proceed to the end.
FCFL’s decision to cancel the ICO shines the spotlight on Indiegogo as it was just beginning to leverage its crowdfunding platform for coin offerings.
It is unclear whether the company’s adventure into utility tokens will be hit or whether it is going to make such tokens available to retails investors in the future. For now, most of the attention will be trained against the company’s next move.