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ICO Pass (ICOP) ICO Review – ICO Token News

Introduction

ICOs are exploding in popularity, bypassing classic Venture Capital funding. However, without a proper KYC (Know Your Customer) check, ICOs have trouble exchanging cryptocurrency for fiat currency — EUR, USD etc. Regulators across the world, including the USA, Singapore, Hong Kong and the UK, have warned companies contemplating an ICO that they may violate securities laws. Those investing have been cautioned that they may lose their money. The ICO Pass team aims to provide a tool that meets the requirements of both simple and enhanced due diligence in a cost-effective way. We will start by

providing the tool for private person KYC and will later also provide support for companies. In order to exchange cryptocurrency for fiat currency, ICO organizers need to show that they have put effort into identifying investors, checking that they are not from ICO banned countries, are not a PEP or on Sanction lists. For corporates, they additionally need to check who is the Ultimate Beneficial Owner (UBO) of the funds and if the person has rights to represent the company. Then there are also requirements that change from country to country – in some countries it will be enough to do Simple Due Diligence up to 10k EUR (12k USD) while in some, Enhanced Due Diligence is required already from 1k EUR (1.2k USD) (Switzerland). Moreover, some countries such as the USA require that only accredited investors can participate.

How we plan to meet regulatory requirements

We will aim towards opening up information about what databases are checked, what are the probabilities of the check succeeding and what are the costs if you add/remove some of them. This will be achieved through negotiation with services that provide identity document verification and watchlist screening, or by integrating directly with those databases.

Additionally we will integrate with banks in order to determine if the person meets accredited investor status. A full check will consist of: e-mail verification, phone number verification (optionally), address verification (optionally), ID document verification, face similarity scan from a live photo (optionally), PEP, Sanction list check, UBO (Ultimate Beneficial Owner) and permission to represent the organization (will be added later), adverse media check (optionally), determining accredited investor status (will be added later).

Users

The ICO Pass product is made in a way that once a person has verified their identity, they can re-use it for several ICOs. Taking that into consideration, we looked at the data of 19 ICOs. From this data it turned out that 2110 unique contributors participated in one ICO. For an alternative view, we looked at the data from a different angle. We came across some research done by Smith and Crown. According to them, the average ICO size has been 2m users. Looking at Etherscan information, an ICO of that size has around 600 contributors (we assumed here that around 5% of users repeat). However, we need to factor in that a lot of small ICOs were done in 2016, thus decreasing the average ICO size. On the projection calculation therefore, we used a figure of 2110 contributors.

Cost of the service

Having user convenience in mind, we decided that the best way forward will be a collecting service via in-app purchase. Apple policy allows setting prices in different tiers. We decided to go with 6.99 EUR (8.52 USD), which is similarly priced to Picops. Out of that, VAT and 30% Apple commission is deducted. Additionally we plan to pay 2.03 EUR (2.47 USD) to Onfido for screening against PEP/Sanction lists and 0.5 EUR (0.6 USD) for the ETH network to write the information in blockchain (we believe that this sum will be enough to do the KYC check in 4 minutes).

Use of funds from ICO Pass tokens

Once the company has finished the roadmap features and has used the funding from Token

Sale, it will purely rely on the funds generated with ICO Pass opened tokens.

Token Sale

20m revenue sharing tokens will be offered in a spend-all second-price Dutch auction. Tokens sold will represent 7% of total revenue. Future related products may have a different revenue sharing distribution and this will be announced publicly upon product launch. Check ICO list to know more about ICOs.

The Sale is an auction type sale, for which the token price is time dependent (tokens get cheaper the longer the sale runs), and sale duration is allocation dependent (the more tokens are bought, the earlier the sale’s deadline). In total, ICO organizers will sell 20m ERC20 tokens, called ICOP. Once organizers issue a new token – KYC Pass for banks (KYCP), ICOP holders will be able to get 5 KYCP tokens for every ICOP token they hold at no extra cost. KYCP token holders, on the other hand, will not be able to get tokens for ICOP.

Discount

There will be an early participation bonus period. The sale will start with an initial 15% ETH bonus for the first hour. For example, somebody spends 100 ETH within the first hour (and this event is included in the blockchain), whereas someone else spends 115 ETH a day later. Both will receive the same number of ICOP tokens. For every period where 2 blocks are confirmed without new contributors, the early participation bonus will drop by 1 percentage point. After the 14th occurrence of this, or after 24 hours (whichever comes first), the early contribution bonus will end.

Team

  • JANIS KIRSTEINS
    JANIS KIRSTEINS
    JANIS KIRSTEINS
    Developed Latvian State ID card architecture and e-Signature solution.
  • GINTS KIRSTEINS
    GINTS KIRSTEINS
    GINTS KIRSTEINS
    Project Manager for e-Signature solution in Latvia. Experience in coordinating 119MM projects.
  • JANIS GRAUBINS
    JANIS GRAUBINS
    JANIS GRAUBINS
    Before joining ICO Pass worked as a Business Developer at London based Innovation agency Unit9.
  • INGEMARS ASMANIS
    INGEMARS ASMANIS
    INGEMARS ASMANIS
    Worked on several large projects, including being responsible for UBS, Credit Suisse KYC Exchange.
  • MAGNUSS KARKLINS
    MAGNUSS KARKLINS
    MAGNUSS KARKLINS
    Worked on the technical execution for Latvian State ID and e-Signature.
  • AINARS KUMPINS
    AINARS KUMPINS
    AINARS KUMPINS
    Worked on the technical execution for Latvian State ID and e-Signature.

Milestones

  • 1
    February, 2017
    ICO launch. Product launch.
    Technically: validate that the owner of
    an Ethereum wallet has passed an ID
    background check stating that they are
    not part of a restricted set of users (e.g. US
    citizen or individuals on official watchlists).
    The background check is run via a third
    party, namely Onfido. The ICO Pass team
    has set up a smart contract system to
    record the outcome of the background
    check on the public Ethereum blockchain,
    i.e. whitelist Ethereum addresses that are
    owned by non-restricted users.
    Legal point of view: doublecheck with
    all the regulators in different countries
    how to even more effectively meet their
    requirements.
    Business: attract first ICOs from Europe.
  • 2
    Mar, 2018
    New databases are added for higher
    accuracy.
  • 3
    April, 2018
    Video identification with live agents added.
  • 4
    May, 2018
    ICO organizer communication tool added
    for contacting ICO contributors.
  • 5
    June, 2018
    Integration with US State Revenue
    Service or Banks to automatically
    determine if the investor is accredited.
    First US based ICO.
  • 6
    November, 2018
    Integration finished with Banks who in
    EU are providing their APIs under PSD2
    regulation. Automatically determines if
    the person is accredited investor.
  • 7
    December, 2018
    Interest payout functionality in app.

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