Exciting times for the New Zealand crypto-sphere with the first Initial Coin Offering (ICO) emanating from this country (and, according to Centrality - the blockchain application provider which has launched the offering - the world's first 'Token Generating Event').

ICOs are a method of capital raising currently in favour with cryptocurrency and blockchain companies - which involve the issuing of digital tokens (or coins) as an alternative to traditional equity financing. The rights attached to these tokens vary significantly from offer to offer, but often look quite different to the usual ownership rights associated with company shares. They do not always provide a share of the company's profits, but often permit holders to interact with the company in some other way (e.g. as the only method of payment on its platform, or through a right to participate in its governance or development).

Given the regulatory uncertainty around this method of capital raising (and recent international publicity involving interventions from US Federal regulators, the Chinese government, Paris Hilton and many others besides) it is positive to see (a) that Centrality are speaking to the Financial Markets Authority, and (b) that Anti-Money Laundering and 'Know Your Client' considerations appear to be at the forefront of the discussion.

For ICOs, and blockchain more generally, one of the fundamental challenges facing developers is to find an implementation of the technology that preserves the benefits of a decentralised, immutable database while also satisfying the need for regulatory scrutiny of transactions and the actors behind them.