The Questionable Block.one Buyback, the EOS ICO and Why with Security Tokens it Would be Different

The problem with ICOs

  • ICOs are not STOs. The token does not grant you any equity or participation rights into the company.
  • always do a thorough due-diligence. This is basic, but it is too often overlooked by many and I wrote about it in the article Tips for the ICO due-diligence back in 2017. For instance, Block.one is a Cayman Island based company (this is already a red flag) and it is the developer of EOS. EOS is not a company by itself. It is an asset, a product of Block.one. When you buy the EOS token you give your money to Block.one and — in consideration for that — you get nothing else than the simple expectation that they will use your money to develop the product. This may or may not happen. You have no guarantee for that. There are no legal obligations. Block.one can use this money to do that (if honest) or they can pay themselves a fat dividend or buyback their shares (like they plan to) or spend it all to party. They can do anything they want with that money and you have no saying whatsoever.
  • do not even consider buying ICOs which do not have an escrow in place, in a reliable jurisdiction, with very clear terms and conditions and with reliable escrow agents to supervise the use and allocation of the funds raised.

The difference with STOs

The EOS ICO, red flags were everywhere

Token holders taken for a ride

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