ICO Rating System Breakdown – Compliance

In ICO processes, token compliance refers to a whole set of conditions that guide the utility of the said token, its intrinsic value, security and ability to trade as a financial instrument as well as the legal and risk assessment reviews. Of equal importance is the token’s readiness as well as the completion status of the platform’s smart contracts infrastructure and the attention that the team and the platform pay to the compliance issues.

Token utility

Most blockchain platforms give users benefits via rights of access that the token offers. Meaning that users derive the intrinsic value of the token by using it to get rights in the network. A good ICO and one that gets all the marks for token utility should have a token that has a defined foundational use or at least several use cases. Such tokens are bound to grow in value once there is established demand for the provisions, goods or services that the network provides.

Security status of the token

The cryptocurrency environment remains the most misunderstood especially among ordinary folks. Most people putting money in the industry are hoping for quick gains especially because the coins and tokens have demonstrated that they can mount good bull runs. Despite the apparent lack of knowledge among a vast majority of these contributors, their interests must be protected. A good ICO, as such, should present a token that is tradable as a financial instrument.

It is, however, essential to understand that laws and regulations governing the transaction of such tokens still have a lot of grey areas. Therefore, the token should give assurance of compliance at the very least. Ideally, its usefulness should be expressed via utility as well as airtight compliance.

Readiness of the smart contracts infrastructure

You know by now that smart contracts are the driving force of the blockchain. Any ICO project, as such, needs a well-defined, fully operational smart contracts infrastructure. However, most ideas that ICOs fund are in their infancies, including the foundation supporting the said ideas. For this reason, an ICO project with a beta version or that is in the process of rolling out the alpha version may be considered as well.

Attention to compliance

The ICO ecosystem remains the most unregulated in the financial services sector. Most teams have taken advantage of this vacuum to collect the equivalent of millions of dollars from the public with little or no intention of fulfilling the promises. Contributors, as such, should apart from other requisite recommendations, pick teams that comply with the regulations of the jurisdictions where the teams operate.

Legal agreement and risk assessment

As mentioned earlier, ICOs operate in an environment that is legally undefined. That notwithstanding, coin generation events can only stand out if their risk assessments are professional. In this regard, five stars are exclusively reserved for ICOs that have top-tier legal agreements or risk assessment documents.


In as much as other aspects of an ICO exercise earlier highlighted are essential, compliance is just as necessary. The project should ensure that the token and platform are ready and abides by all due processes.

Part I – Whitepaper

Part II – Product



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