Monday 23 October 2017 3:05 am

The London Token Fundraising Manifesto

Four chilling words, “A spectre is haunting”, unite Karl Marx, Friedrich Engels, and the Communist Manifesto of 1848 with free market adherents and cryptocurrency libertarians 169 years later.

The spectre is that “smart ledger” technology may fall prey to incompetency or fraud because of a token and coin investment bubble driven by a combination of rational and irrational investment, honest optimism and hope, both sadly mixed with a small number of lies and scams. Smart ledgers enable new forms of trade. They combine distributed ledger (aka blockchain) technology with embedded computer code, cryptography, and consensus techniques for validating transactions.

Initial Token Offerings (ITOs) and Initial Coin Offerings (ICOs), if done safely and well, offer funding for a new wave of firms based on “smart ledgers”. But with cryptocurrency valuation approaching $200bn from $50bn less than one year ago, there seems to be a bubble forming.

Our London Token Fundraising Manifesto sets out an ethical framework and a personal code of conduct for token issuers and the communities that support them, firmly based on the City of London’s four words invoking openness, honesty, transparency, and fairness, “Meum Fidem, Meum Pactum” (“my word is my bond”).

We ask some basic questions:

Do your tokens have a truly necessary, beneficial, commercial or social purpose?

Is it clear to everyone purchasing your tokens what your tokens represent, e.g. shares in a venture, project rights, a future trading coin, a promise of goods or services, a ‘social’ credit?

Do your “money supply” rules or algorithms align value with the commercial or social purpose both immediately and over time?

Do you have a mechanism to return fairly any excess or unnecessary resources raised?

Do you have the professional, ethical and technical resources to deliver?

The market will decide, but the market often takes a long time to get wise. We, the undersigned and others in this flourishing industry, hope that our self-regulatory manifesto provides fundraisers a better starting point for raising capital, enthusiastic investors with a sensible degree of caution, and speeds appropriate adoption of tokens, coins, and smart ledgers.

Antony P N Abell, founder, Universal TrustMe Engine

Derin Çağ, founder of Richtopia and co-founder of Marketing Runners

Tim Campbell MBE, founder of Bright Ideas Trust and co-founder of Marketing Runners

Neil Cattermull, technology influencer and analyst

Jody Cleworth, director, SOLAS VGM

Vinay Gupta, founder, Hexayurt | Mattereum

Herbie Skeete, managing director, Mondo Visione

Matthew Leitch, director, Ridgeway Expertise Company

Professor Michael Mainelli FCCA FCSI FBCS, executive chairman, Z/Yen Group

Michael Mathias, founder and chief executive, DasCoin

Trent McConaghy, founder and cheif technology officer, Ocean Protocol | BigchainDB | IPDB

Bob McDowall, special adviser, Cardano Foundation (Zug)