Why you should care about China banning initial coin offerings
A decade after her hit reality TV show “The Simple Life” ended, socialite and perfume-purveyor Paris Hilton is embarking on a new venture. You might call it “The Crypto Life.”
In a tweet on Sunday, Hilton said she was “looking forward to participating” in an initial coin offering run by LydianCoin Pte Ltd, which describes itself as a “utility-token that allows cryptocurrency-enabled purchasing of targeted, A.I. driven digital marketing and advertising services” to be operated and developed by Gravity4 Inc., an online advertising company.
Such ICOs involve the sale of virtual coins based on the ethereum blockchain, similar to the technology that underpins bitcoin. Equity owners receive virtual tokens unique to the issuer, meaning returns are reliant on a given startup’s growth and liquidity potential.
To critics of the booming world of ICOs, Hilton’s involvement is the latest example of a fad finance trend that has already seen the offerings raise $1.25 billion this year. To its supporters, it’s evidence of the networking effect that will quicken the development of ICOs.
Lydian pointed out on Twitter that Hilton had a history of interest in ethereum, having dined -- and instagrammed a picture of herself -- with the blockchain company’s founders back in September 2016.
Still, her timing may be, to riff off her old catchphrase, not that hot. Hours after tweeting her involvement in LydianCoin, China declared ICOs illegal. Meanwhile, U.S. regulators have said they have jurisdiction over ICOs, and companies that raise money through the sale of digital assets will have to adhere to federal securities laws.
However, Hilton is far from the first celebrity to hype ICOs. Boxing star Floyd Mayweather and American rapper The Game have touted the diverse digital token sales over the past month alone.