Raising Funds
Respecting AML and KYC protocols is a must when you’re planning to launch your own crypto launchpad. In that sense, being aware of the policies that apply to your jurisdiction will be essential for the success of your project. Unfortunately, it’s often easier said than done: each jurisdiction has its own requirements. That’s why understanding the regulations that apply where you plan to operate is extremely important. For example, if you’re planning to launch your launchpad in Europe, the EU’s Markets in crypto-assets regulation, which you might know as “MiCA”, requires that all crypto service providers implement AML/KYC procedures and obtain licenses so they can operate.

Once you’ve got a good understanding of how you’ll manage AML and KYC processes, you’ll have to make your first important decision: raising funds in fiat or crypto. Bearing in mind that either solution comes with its own set of regulatory considerations. Raising funds in fiat involves respecting traditional financial regulations, which often require more extensive and complex documentation. Typically, you would have to obtain licenses from financial regulatory authorities and allow all your financial transactions to be easily traceable. On the other hand, raising funds with crypto can be more flexible, but comes with its own challenges. If you’re choosing to go that route, you’ll have to care about more complexity, as you’ll have to navigate a more ambiguous legal landscape and manage crypto volatility.

One of the most popular ways to raise funds for a crypto project is to opt for an Initial Coin Offering (ICO). Basically, ICOs allow new projects to sell their tokens directly to investors, before the official launch of a token, app, coin, or even service. Initial coin offerings were particularly popular in 2017-2018, where crypto investors who would buy tokens early would do so, hoping that the tokens would increase in value later on. Unfortunately, ICOs from this period were also a breeding ground for many deceptive - and sometimes straight-up scammy - projects. As a response, launchpads emerged, and are now considered a much safer alternative to ICOs. Popular platforms like Binance Launchpad, for instance, make sure that any project that they promote for their users meets the legal standards before they’re allowed to raise funds.