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Messari Wants to Standardize ICO Transparency

According to a press release, Messari, a crypto market research firm, has launched a digital registry that it hopes will provide standardized, reliable data about ICOs and crypto assets, with the ultimate goal of making crypto investing safer for everyone.

According to the release, the initiative, which Messari is calling a “disclosures registry,” will provide “a single source of truth for basic cryptoasset information” that will help investors and regulators evaluate ICOs and other crypto-investment initiatives. The registry will include “basic information regarding their token design, supply details, technology audits, official communication channels, and relevant team members, investors, and advisors,” the company wrote.

This data will be provided voluntarily by companies in the crypto space that choose to collaborate with Messari. So far, 12 companies have signed on, Messari said.

Messari launched in October 2017 with the goal of providing universal access to data about the crypto market. Messari’s website suggests that the company’s goal now also extends to providing “curated insights” to crypto investors, including a managed list of news stories that Messari deems relevant to crypto investors. In that sense, the startup looks like it wants to be something of an analyst firm too.

But even if the disclosures registry is not Messari’s first offering, it looks to be the marquee resource in fulfilling Messari’s overall mission “to drive common standards for investor protection and industry self-governance that can cross borders,” per the press release.

Messari has also indicated potential plans to launch a digital token designed to regulate other digital tokens, but it’s unclear for now what that would look like or when it might happen.

Why Do ICOs Need a Disclosures Registry?

If you’ve followed crypto news at all over the past couple of years, it’s easy to understand why the type of registry Messari is building would benefit the industry.

To date, the wildly decentralized and loosely regulated world of crypto investments and ICOs has given rise to a torrent of inconsistent, ambiguous, hard-to-find or, in some cases, downright fraudulent information. If you were considering investing in an ICO, especially during the 2017-2018 boom in ICO activity, you probably relied on Reddit threads, Telegram channels and unverified information hosted on websites of unclear ownership for information about the crypto asset in which you were potentially investing.

This is not exactly a good way to go about evaluating investment opportunities, and it’s a far cry from the type of straightforward reporting that conventional companies have to provide to investors when launching an IPO or other traditional type of funding campaign.

Messari’s registry would solve this challenge for crypto investors by providing a consistent and (in theory, at least) reliable and verifiable set of information about crypto companies that are seeking investor funding. The registry’s value lies not just in combating the spread of ICO misinformation and fraud but also in delivering a standard set of information about different crypto investment opportunities, so that investors can make apples-to-apples comparisons between them.

Perhaps the greatest potential flaw in Messari’s vision is the fact that it is relying on companies to report data voluntarily. For that reason, the disclosures registry seems ill-suited to provide transparency into crypto companies that don’t actually want to be transparent and will, therefore, simply choose not to participate in the registry.

That said, if enough companies sign onto the registry, it could become a defacto standard, giving investors and regulators an easy way to identify ICOs that may not be keen to play by the rules because they will be the ones that haven’t used Messari’s registry.

Critics might also point out that, although Messari is pitching its registry as “open and decentralized” in the sense that anyone can access it, Messari itself controls the process for adding data to it. You, therefore, have to trust Messari in order to trust the registry. Given that Messari’s success hinges on its ability to provide reliable crypto investment data, however, the company should be naturally incentivized to do a good job of remaining fair and reliable.

Overall, the Messari disclosures registry appears to be good news for folks who would like to see a more stable and fraud-resistant ICO scene without having to rely on heavy-handed government regulation to make that a reality.

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