Filecoin Raises $52 Million Before Initial Coin Offering Even Starts

The cryptocurrency market is booming, attracting new investors at breakneck speed. Celebrities are collaborating with blockchain startups and boasting about their alternative coins on Instagram. Meanwhile, two Dutch rappers just released a track about getting rich by trading cryptocurrency, an anthem called “Crypto Fever.”

Tokenized fundraising is now one of the market’s biggest mainstream trends. Initial coin offerings have quickly diversified and raised $1.2 billion so far this year, according to Forbes. New fundraising records crop up almost weekly. On Friday, a Protocol Labs project called Filecoin reportedly raised $52 million from presales before the ICO even opens with an official launch on Monday.

“Filecoin is a decentralized storage market, think of it like Airbnb for cloud storage, where anybody with extra hard drive space can sell it on the network,” Protocol Labs founder Juan Benet told International Business Times. “Filecoin is a token with fundamental value. Filecoin is like Bitcoin, but miners amass hard drives instead of hashing computers.”

Patrick Murck, co-founder of the Bitcoin Foundation, told IBT he found Filecoin to be one of the most exciting projects in the blockchain space right now. Clearly, he’s not alone. Benet told IBT Silicon Valley veterans like Ram Shriram, an early investor in both Google and Amazon, Skype cofounder Jaan Tallin, Coinbase cofounder Fred Ehrsam, and Sam Altman, president of Y Combinator, were all among the lucky few who snagged presale tokens. They also happen to be among the lab’s previous investors.

Filecoin’s ICO will be remarkably different from other ICOs in the past. On Monday, it will be the first ICO featured on a new platform called CoinList, which is only open to accredited investors. Many people in the cryptocurrency community at-large are devoted to democratizing technology and financial inclusion. So Filecoin admirers have been outspoken on social media about supposedly disingenuous language regarding “limited amounts” of “small investments” from around 150 presale participants.

Fintech entrepreneur Stefano Bernardi wrote in a blog post the Filecoin team is “being insanely greedy” and giving unfair bargains to their friends before offering opportunities to other investors. Benet tweeted Bernardi’s criticism was full of false and “unjustified accusations.” ICO presales to industry insiders is pretty standard at this point, although it is often criticized.

“It [Bernardi’s blog] had a completely broken way to value the token, which showed the person hadn't understood or maybe not even read the technical paper,” Benet said. However, even if Bernardi’s specific numbers are off, it is clear Filecoin’s ICO takes a more traditional approach to raising capital than many of its ideology-driven predecessors like Ethereum.

Read: Why You Should Care That Hedge Funds Are Joining The Crypto Boom

ICOs are such a new and experimental addition to the startup ecosystem that they operated in a legal grey zone until the Securities and Exchange Commission issued a statement in late July. Now it’s clear that some ICO tokens, although not all, classify as securities and will be regulated as such.

This is part of the reason why Protocol Labs partnered with AngelList cofounder Naval Ravikant, who happens to also be one of the lab’s previous investors, to simultaneously launch CoinList as a blockchain-centric fundraising platform. “We are doing an offering of SAFTs (Simple Agreement for Future Tokens), an instrument designed to bring compliance to token sales and ICOs,” Benet said.

Most experts predict regulators will issue more rulings about ICOs in the near future. Up until now, ICOs were generally open to the public, even if wealthy industry insiders dominated sales for popular projects. Now it looks like Filecoin will be a harbinger of both blockchain network infrastructure, offering a radical new approach to digital storage, and cryptocurrency fundraising as well. How will the widely admired project handle criticism about its business practices?

The young blockchain industry could mature to create many diverse models for transparency and inclusion alongside enterprise, or it could eventually mirror traditional venture capital. Filecoin has indeed become one of the summer’s most influential new blockchain projects.