ICO Update: Red Pulse Limiting Investments to $51,000 Total
Time has come to do an update on Red Pulse, which has reacted to the news of China’s declaring ICOs as unlawful in the most acceptable way possible: they’ve postponed their ICO sale and have, so far, made one minor, but significant, change to the way they’re operating the funding of the sale.
Huge thanks to Hacked community member H.H. for tipping the author off to the e-mail blast sent by Red Pulse. Indeed, if the author were expected to open every e-mail sent by ICOs, then that would become his full-time position.
Most of the e-mail reads as follows, and describes the changes they’ve decided to implement in the funding rules:
Thank you for your interest in the Red Pulse RPX sale. As you may know already, we are postponing the sale to gain more clarity on the regulatory environment. We want to ensure we are being 100% with all relevant regulatory policies and legal boundaries before moving forward. […]
[…] Due to community demand, we are adding to our smart contract a one hour window at the beginning of the RPX sale that limits each contributor to a cap of USD 1,000, with only one transfer allowed per person. Multiple transfers, and transfers greater than USD 1,000 worth of NEO tokens will be refunded.
Following this one hour window, the RPX sale will continue with a higher USD 50,000 cap, as planned previously. In this period, participants will also be limited to one transfer in this period. Note that a contributor may thus contribute once during the one hour window, and subsequently contribute a second time after this one hour period. The total max contributor for a single person is thus USD 51,000 worth of NEO tokens. Contributions received during the RPX sale will not be accepted if any information is missing, or if the NEO wallet address does not match what you submitted.
Impact on RPX Distribution
With a small cap on the amount that each person can contribute, the immediate distribution of the RPX tokens on the market will be much wider than some ICOs. As such, we should see a more realistic price emerge in a shorter period of time, which will also have an effect on the value of NEO itself. At present time, to maintain a price higher than ICO, the RPX token would only need to be worth $0.025.
Impact on Outside Investors
The new limit to $51,000 is a pretty nifty closing of a semi-obvious loophole some were thinking of exploiting: get someone in an allowed jurisdiction to buy them for you. It would require a willingness to lie on the part of the person making the purchase. The impact on Red Pulse would be less because they had checked all the legal boxes, but nevertheless, we can deduce from this move that they are playing “better safe than sorry” to its ratiocination.
It becomes much more difficult to get around such a rule when there are low caps like this in place. While Red Pulse bills this as a move to ensure a more even distribution, it seems overtly evident that this unintended side effect is also in line with their mission of being a regulatory-compliant outfit.
Thus far, reaction from potential investors seems positive: especially for those coming from the legacy investment world, it’s comforting to see a team with a strong grip on reality as an asset.
The author remains bullish on NEO and RPX. He believes the Chinese government simply wants to find a way to regulate the market, and once they have, they will bring it back to life. At such at ime, demand for RPX tokens might significantly increase, barring a diffusion of competing interests clouding the line to the cash register.