Jurisdictional bakeoff for ITOs Estonia vs Delaware


#1

Let’s say you are a digital entrepreneur in Ulan Bator with a game-changing product/idea. Your location precludes traditional VC. You are not interested in your home market (Mongolia), your product is global. Where do you register your company? In ye olden days, the answer would have been restricted to setting up in Mongolia. Now as you think globally and you think about raising money via an ITO, you have choices. The two most forward looking in this space are Estonia and Delaware. I deliberately used the example of an entrepreneur in Ulan Bator to eliminate home country bias. If you are in America, you have a home bias to Delaware. If in Europe, you have a home bias to Estonia.

There are other jurisdictions – UK, Switzerland, Malta in Europe and Singapore in Asia come to mind.

Delaware has great strength in traditional equity and is forward-looking on Blockchain. Estonia is a leader in e-residency and as the home of Skype in its early days has decentralization in its DNA.

Who has experience to share on these two jurisdictions? Or other jurisdictions that have a lot to offer in ITOs?


#2

Hi! New to Fintech Genome…
I’m a lawyer form Latvia which is neigbouring Estonia.
The e-residency program could enable an easier solution in the future to link the e-residency database with the Business Registry and recognize shareholders based on a blockchain where token-shares are issued.
By analogy, in Latvia a company investor must contribute (fiat) cash or some asset (with independent valuation). Not sure whether any valuator would take a risk to make a conclusion about value of Ether contributed. So I think issuance of real (publicly recognized) shares linked with tokens-shares is yet some time away.
As far as I know there have not been any practical cases in Estonia or actually in the Baltics as a whole related to token pre-sales.
So actually Delaware is one step forward in the regulatory context. But Estonia is also on fast track :slight_smile:


#3

Hi @Damarkhos welcome to Fintech Genome. I think today we are still in such an early stage and the current ICO hype phase will burn out within a few weeks (the market will self correct before regulators figure out what to do).