An initial coin offering in Brazil (ICO) is a public fundraising method in which funds are raised for the purpose of developing a cryptocurrency. It is a type of crowdfunding, and, depending on how the company structures it, investors are offered the option to purchase tokens or new cryptocurrencies in exchange for their funding.
Our Brazil company formation experts can also assist you with matters related to initial coin offerings, once you set up your crypto company and are ready to take on this next and important step in the life of your business.
The ICO in Brazil will follow the incorporation of the cryptocurrency company that will propose the initial coin offering. For this purpose, crypto investors will first use the local services needed to set up a company in Brazil, such as those offered by our local company incorporation experts.
Alternatively, we can also help investors open a branch in Brazil.
For investors who are ready to launch an ICO in Brazil, the local guidelines or regulations (as they may apply), such as those set forth by the Securities Commission in the country (Comissão de Valores Mobiliários) are relevant and should be observed. Moreover, any amendments or additions to the existing laws, such as any regulations to impose the need for a crypto license in Brazil, will need to be observed by these companies.
Types of ICOs
Crypto companies that decide to launch an initial coin offering in Brazil will face the choice of selecting between the public and the private ICO:
- The public initial coin offering is the most widely used one, as it is a crowdfunding method that aims to attract a large number of institutional investors, as well as the general public;
- The private ICO in Brazil is proposed to a limited number of investors; because this is a closed offering, the company launching the ICO can also provide certain terms (in practice, it could ask for a minimum investment amount for participation rights).
Regardless of the type of ICO, the company will rely on, it will need to work on and propose a product that will gain investor confidence. For this purpose, thorough marketing research is needed, along with a sound business proposal.
Starting the ICO in Brazil
An initial coin offering is launched after the company has diligently assembled a business plan, and created a cryptocurrency token that will be offered in exchange for the funding provided by investors. A cryptocurrency company will also need to comply with the relevant laws, and the need to apply for a crypto license in Brazil if the activities are deemed to be regulated by the Bank of Brazil and/or the Securities and Exchange Commission of Brazil.
A successful ICO will depend on a number of factors, however, our team briefly outlines some of the most important steps investors should consider when they launch an initial coin offering in Brazil:
- Develop the whitepaper: this is the document that describes the project; it includes the goals of the company, the foals for the token, as well as technical details; a good whitepaper will play a crucial role in convincing investors to participate in the ICO in Brazil;
- Create the marketing strategy: the community dedicated to the project, the channels used to discuss the token, engagement, press releases, and other strategies to make the ICO known to investors;
- Select the token sale method: this will be the way in which the tokens are offered to the investors; these can be sold at a fixed price, according to a maximum funds goal, or an auction model can be used;
- Perform the sale: this is the actual initial coin offering in Brazil, properly scheduled and planned for.
If you have questions about the crypto license in Brazil, as well as the latest legal regulations in this business sector, our team can answer your questions depending on the activities in which the company will be involved.
According to a cryptocurrency data tracking website that follows 18,896 cryptocurrencies traded on more than 400 exchanges:
- More than $50 billion have been raised through ICOs;
- The survival rate of an ICO is 10%;
- The largest ICO raised $4.2 million in 2018;
- The ICO concept was first introduced in 2013.
Investors who followed the steps to open a company in Brazil and are now ready for the ICO in Brazil can reach out to us for complete information.