Although it may not seem so at first glance, Russia is the world leader in growth in the ICO project investment market. See for yourself: in 2016, about 100 million dollars were invested in just over 100 crowdsales, whereas in 2017 investments in successful ICOs topped 4 billion.
This is why the Russian Federation is seen as a target market by foreign initiators as well as locals. If this growth trend continues, Russia will become the world leader in cryptoinvestment, and it’s not just a matter of Russians’ propensity toward high-risk deals (MMM is still a fresh memory), but also that two of the largest blockchain networks are legally located in the RF, and that the country has established a lenient legal system around cryptocurrency and engaging in such transactions within the country is officially permitted, unlike, say, China, or, at least for now, India.
A Word About the Law
As mentioned above, Russia is one of the most advantageous countries for conducting and funding ICOs.
The amendments included in the new version of the Russian law on cryptocurrency primarily affect mining.
When it comes to ICOs, the relevant commissions have limited Russian citizens’ abilities to list tokens on foreign platforms. But even that limitation is easy to sidestep by registering a legal entity in another country or offshore.
Furthermore, there is a project underway within the Eurasian Economic Union, of which Russia is a member, among others, to unite the computational capacities of Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan. This is yet another confirmation of the government’s serious intention to integrate cryptocurrency into the country’s financial markets.
The technical capabilities for these sorts of projects are there as well: just recently, at Moscow Exchange conference in September 2018, representatives of Alfa-Bank, VTB, Gazprombank, and Sberbank announced their willingness to process transactions using cryptocurrency, including crowdsales.
Psychological Characteristics of the Target Market
Taken together, these three factors are the most tangible threat to further development in cryptocurrency investment in Russia.
Forecast for the Near Future and Recommendations for Conducting ICOs
The advantageous attitude of the government and commercial banks toward ICOs lend a positive vibe to discussions on the future of crowdsales in Russia. Of course, the same could have been said about China until the recent bans, but for now there is nothing to be worried about for the next two to three years.
However, despite all the positives in the Russian investment market, the percentage of successful ICOs relative to the total number of announcements posted to trackers remains below 2%. On the general global market, this figure is around 17%, and that is a lot, but there is no point focusing exclusively on Russia.
RMC, SONM, Polibius, and other successful projects had foreign capital as early as their presale stage, so it is best to conduct PR campaigns, at the very least, in the US and China, and to post on one of the blockchain platforms not tied to Russia, such as Ethereum. In this way, you can avoid running into a discrepancy in legal frameworks, without losing access to Russian investors. To do so, under the current bans, you would have to register your company abroad, but it’s worth the effort.
There is plenty of market to go around, and even though the number of investors peaked back in late 2017, the total volume of funds continues to grow and many ideas, even those less innovative, can find their investors in Russia. It is worth noting that, according to statistics, projects with better yields and bounty terms see significantly higher results. The risk-seeking Russian investor pays practically no attention to financial grounding: the higher the profit, the better.