If 2017 and the first quarter of 2018 taught us anything, it is that businesses are beginning to favor ICOs over IPOs. The big reason for this is because when an ICO launches, a business does not give away any portion of their company, meaning they retain complete autonomy. Running a cryptocurrency rather than offering stocks is also an impressive alternative for raising funds. While these two models both have their uses, there are several differences which set them widely apart.
For instance, publicly listed companies owe a special obligation to their shareholders whenever they make important decisions, but the same is not directly expected of a cryptocurrency. This is especially relevant when regarding buy-outs, where a larger company buys another. Publicly listed companies need to make announcements and sometimes facilitate votes when it comes to buy-outs. Cryptocurrencies do not. However, has a cryptocurrency ever actually been bought-out before?
Theoretically buying a cryptocurrency
In a theoretical sense, it is entirely possible for one company to buy the code and rights to a cryptocurrency. Most of them run in the same way as a regular, private, company. Although, you could argue that there would be some elements which they can never pass ownership of, such as the actual blockchain itself (if it was decentralized), but the source code and branding could still be bought.
The big question is would there be any obligation to satisfy coin holders? Unfortunately, the answer is no. While it would be in the new company’s interest to keep its users happy, they wouldn’t need to in a legal sense. If they wanted, they could even remove the coin or token altogether and continue without it.
Has a cryptocurrency ever been bought-out before?
There is no current knowledge of any cryptocurrency being bought-out before, but there are a few similar situations we can examine.
Ripple’s Board Members
Many people say that Ripple is partially owned by large, traditional, corporations due to the members of its board and the business ties which they have. To take one example, their board member, Zoe Cruz, was the Co-President of Morgan Stanley in 2007. Some say this means that Morgan Stanley has bought a theoretical stake in Ripple’s affairs.
EOS and Tron’s Elections
Both EOS and Tron are running elections that determine which organizations will run their blockchains. While the organizations that win won’t precisely assume full control, their word will have much higher importance within the ecosystem. As the winning of such elections relies on serious marketing and advertising, you could argue that the winners will have bought the blockchain. In both cases, those that are elected will want to satisfy coin holders because they will want to be elected again in the future.
Buying the ability to perform a 51% attack
In a highly theoretical sense, buying the tools and coins needed to run a 51% attack could be considered the same as buying a cryptocurrency, at least for a few moments. An example that comes to mind is the Verge hack. Hackers assumed control of the blockchain for a period and used it to their advantage.