Investment.net

Banner ads header
Icon Collap
...

Investment.net

Home / Mining For Answers: why did Kodak postpone their Initial Coin Offering (ICO)?

Mining For Answers: why did Kodak postpone their Initial Coin Offering (ICO)?

 

On Jan. 30, 2018, some 20 days after anouncing their expected launch of their own cryptocurrency KODAKCoin, the Eastman Kodak Company announced Jan. 30 that the launch of their cryptocurrency KODAKCoin would be delayed in order to evaluate the status of potential investors. The delay was announced the day before the Initial Coin Offering (ICO) was set to start, according to the project’s Jan. 9 press release.

Kodak intends to run an ICO that offers security tokens as an ‘exempt offering’ — this means the company does not have to register their security with the US Securities and Exchange Commission (SEC), but only “accredited investors” can participate in the ICO. However, it seems that they did little to no verification of the accredited investor status of the more than 40,000 people that registered to purchase the security. 

In the United States, all securities issued must be issued according to regulation D or in exemption to it. To sell securities without registration, the offering must be made only to accredited investors. The SEC requires that an individual accredited investor have a net worth that exceeds $1 million, or an annual income of at least $200,000, along with other conditions.

The company claims it needs “several weeks” to verify the “accredited investors” status of those who applied to invest in the ICO. For those outside the US, local laws will be applied. 

According to Marketwatch, Kodak's stock (KODK) prices sharply increased after their Jan 9, 2018 press release from $3.1 to almost $11 the next day. However, after the delay was announced on Jan. 30, the stock dropped by more than 18 percent, aand continues to trend downwards falling nearly 50% from it's interday high less than 3 weeks prior.