Investors will have to wait a bit longer to get their hands on Kodak's cryptocurrency offering, KodakCoin, due to a vetting minefield.
According to Kodak, over 40,000 investors have expressed interest in joining the token sale. However, due to US regulations, each individual must be thoroughly vetted before being permitted to invest.
ICOs are similar to traditional IPOs offered by companies. However, they are often linked to exit scams, poor vetting, and regulators worldwide have little control over what happens to the proceeds -- sometimes leaving investors out of pocket.
In Kodak's case, as an established and respected brand, there is no chance of an exit scam -- but in the bid to conduct things properly and stick to the rules, there will be a delay to the ICO's launch.
These token sales, in which investor funds are converted into a firm's own cryptocurrency, are used to fund projects -- usually related to Blockchain, the technology underpinning virtual currency trading.
Kodak's ICO is no exception and is focused on utilizing the Blockchain to enable image rights management for professional photographers.
"With KodakCoin, participating photographers are invited to take part in a new economy for photography, receive payment for licensing their work immediately upon sale, and, for both professional and amateur photographers, sell their work confidently on a secure blockchain platform," Kodak said.
Kodak's ICO is being offered pursuant to an exemption from registration under the US Securities and Exchange Commission's (SEC) 1993 Securities Act.
Under the terms of these regulations, every investor participating in the KodakCoin event must be vetted -- and this also means that many of us are banned from participating.
Potential investors must be "accredited investors," in other words, with net worth individually -- or with a spouse -- exceeding $1 million, or an individual income in excess of $200,000 annually. If the investor has a partner, the minimum amount required is $300,000 per year.
"In addition, the KodakCoin ICO will be offered outside the US to select non-US persons in accordance with the applicable laws of each jurisdiction where such offers and sales occur," the company said in a statement on its website.
Verifying accredited investors is expected to take several weeks, after which we can expect the ICO to take place.
The event may be delayed, but cyberattackers seeking to make a profit are already at work. Kodak has been made aware of scams and phishing attempts touting the KodakCoin and has warned investors not to respond to email attempts or non-official social media accounts pretending to be Kodak.
According to Ernst & Young, between 2015 and 2017, cybercriminals have managed to steal close to $400 million in cryptocurrency from investors by exploiting ICOs.
Previous and related coverage
The KodakCoin cryptocurrency and the KodakOne rights management platform will both be backed by blockchain security, Kodak has announced.
Future mining rigs could make use of Samsung chips to mine cryptocurrency.
ICOs are risky, potentially lucrative, and now a top target for threat actors looking to cash in.