TokenRaise

Standards for Crypto Projects

Industry best practices for Initial Crypto Offerings

We believe the best practices and standards are those that are built, maintained, and practiced by everyone in the community. There is an incredible community working to establish best practices and standards for initial crypto-asset offerings, including The Brooklyn Project, the Crypto Working Group, the CryptoCurrency Certification Consortium, and the Virtual Commodity Association proposed by Gemini. We know that can be difficult to maneuver through so many different standards and approaches: That’s why TokenRaise has brought the standards and best practice expertise in-house. 

We’re here to help you make sure that your ICO/STO meets the standards and compliance requirements that you need to be competitive. You can rely on us to stay on top of the fast-changing expectations of the crypto-asset marketplace, and to help you do the same.

The Token & Smith Standard

Appropriate industry standards that govern the development and use of cryptocurrencies and cryptosecurities are essential for ensuring integrity and confidence for all stakeholders. TokenRaise is here to help you evaluate and demonstrate your project’s compliance with some of the high standards and best practices that are being developed by the crypto-community. 

We will help you to understand what standards exist, which standards are essential, and we will conduct an audit of your project that will help you clearly communicate and validate the high standards of your project.  We have organized four pillars of standards and best practices for ICOs & STOs, drawing from a range of current industry best practice, and aspirational initiatives, and these include:

Depending on your goals, there may be different levels of best practice that you need. At TokenRaise, we differentiate between the essentials (Token Standards) and the above-and-beyond (Smith Standards), as outlined in the sections and tables below. 

Regulatory Compliance Standards

TokenRaise actively monitors the developments of cryptocurrency and cryptosecurity regulations around the world. At a minimum, TokenRaise requires that all crypto-asset projects certifying on these standards meet all current and known-to-be-pending regulations and requirements of the United States Securities and Exchange Commission (SEC), by the end of certification. In addition, where appropriate, TokenRaise requires all projects certified with TokenRaise meet applicable regulations and requirements of non-U.S.A. markets, in which additional transactions may occur at the local/regional level, at the time of the ICO. The specific standards for compliance, and differentiation between the Token Standards and the Smith Standards, are outlined in the table below. 

Checklist ItemToken StandardSmith Standard
Compliance with US SEC current regulations, via TokenRaise Audit
Compliance with known-to-be pending US SEC regulations, via TokenRaise Audit
Compliance with non-US regulations (as appropriate)
Compliance with known-to-be-pending non-US regulations (as appropriate)

Project Transparency Standards

TokenRaise, as well as many others in the industry, are only interested in doing business with those who are willing to share information about themselves, their organizations, and their plans. As such, transparency requirements are enforced by TokenRaise for all ICO support work. Transparency standards are important for ensuring that potential investors have sufficient information to gauge the value of the ICO and project, as well as to gauge the credibility of the project team. The specific standards for transparency, and differentiation between the Token Standards and the Smith Standards, are outlined in the table below.

Checklist ItemToken StandardSmith Standard
Full team profiles included in the ICO material and documentation
Access to external profiles of full team included in the ICO material
Project White Paper included in ICO material
Project purpose and need clearly defined and described
Project objectives clearly stated in the ICO material
Project roadmap linking ICO funding to project objectives and milestones
Cryptocurrency/security code provided for review with ICO material
Project code (if appropriate) provided for review with ICO material

Corporate Responsibility Standards

TokenRaise believes that companies can be profitable as well as good for the world. To have the best chance of being responsible stewards of investor interests, companies that certify through TokenRaise must also demonstrate that they are responsible in other ways – toward their employees, towards the customers, towards their communities, and towards the environment.  As such, Corporate Responsibility requirements are enforced by TokenRaise for all ICO support work. 

Corporate Responsibility standards are important for ensuring that responsible and sustainable business practices are built into the ICO project from the very start. In addition, this aspect of the Smith Standard ensures that potential investors have sufficient information to assess the ‘good-for-the-world’ potential of the project, and credibility of the project team. The specific standards for Corporate Responsibility, and differentiation between the Token Standards and the Smith Standards, are outlined in the table below.

Checklist ItemToken StandardSmith Standard
Disclosure of employee ownership %
Minimum 25% employee ownership model
Disclosure of ownership diversity
Inclusion of Vision, Mission, Goals, and Values of organization
Organizational goals and/or ICO project outcomes that address existing gap and/or create positive externalities for community/society
Sustainability-related goals and commitment to sustainability reporting (as appropriate)

Having a focused and engaging social responsibility strategy as part of your ICO and project only improves on the appeal of your offering to potential investors, and only serves to enhance your business performance. This standard requires you to consider the appropriate social responsibility strategy for your ICO. TokenRaise would be happy to support your efforts to develop a social responsibility strategy, which may include minimum commitments for employee ownership, ownership diversity, Board diversity, and equitable compensation, or even more encompassing aspects of being responsible stewards of your investors’ money. We can help!

Security Standards

Security is of paramount importance to the industry, and as such TokenRaise is aligned with the information security standards that have been developed by the CryptoCurrency Certification Consortium (C4). The CryptoCurrency Security Standard (CCSS) is the initiative of the C4, and has been designed to complement existing information security standards as well as well-known cryptocurrency best practice.

To certify with TokenRaise, ICOs must have demonstrated compliance with the Token Standard security requirements, as outlined in the table below. This includes having a knowledgeable and experienced security professional on the project team; in addition, it requires that the ICO and project be compliant with standard security practices, as well as CCSS Level 1 system requirements.

The Smith Standards will be credited to those ICOs and projects that meet CCSS Level II or Level III system requirements. TokenRaise is responsible for conducting the audit to confirm the level of compliance and provides this information as part of the ICO material and documentation. The specific standards for security, and differentiation between the Token Standards and the Smith Standards, are outlined in the table below.

Checklist ItemToken StandardSmith Standard
Knowledgeable and experienced security professional on project team
Certified Ethereum Developer (CED) on project team
Information system compliant with standard security practices
Compliance with Cryptocurrency Security Standards (CCSS)*

The Cryptocurrency Security Standard, along with what is required to meet Level 1, 2, and 3, can be found here. TokenRaise, during its auditing process, will reference this checklist even as it is updated. 

*Copyright (c) 2016, CryptoCurrency Certification Consortium (C4);cryptoconsortium.github.io/CCSS/, 08-22-2017

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