The initial coin offering ICO has emerged as a corporate financing trend just as volatile as many of the cryptocurrencies themselves Earlier this year CoinDesk data revealed more money was raised via ICO in the first quarter of 2018 than in the entirety of 2017 totaling 63 billion raised in those first three months However Autonomous Research recently released its own data that may signal a slump in ICO noting that a mere 326 million was raised in August significantly down from the 15 billion raised via ICO in July It marked the first drop in ICO funding in more than a year according to Bloomberg reports citing a correlation between ICO funding declines and drops in cryptocurrency values Ether for instance seems to have dropped in value just as many organizations that had previously raised funds in Ether via ICO cash out so as to finance their operations and pay for expenses Bloomberg said This week US Representative Warren Davidson R-Ohio is hosting a Legislating Certainty for Cryptocurrencies roundtable with financial firms venture capitalists VCs and cryptocurrency companies all gathering to say their piece on the shaping of crypto regulation Reports in CNBC said Davidson described the existing legislative framework in the cryptocurrency market as sloppy and invited industry stakeholders to participate in the roundtable in an effort to preempt a heavy-handed regulatory approach that could stall innovation and kill the US ICO market The ICO can undoubtedly be a lucrative source of funding for companies However firms that choose this path often go it alone navigating cryptocurrency volatility and regulatory uncertainty without access to advisors and other support There is a big gap in the market says David Siemer founder and CEO of Wavemaker Partners He is also CEO of his new venture Genesis a company formed to provide consulting and asset management services in the context of cryptocurrencies Not only do the founders of projects raising funds via ICO rarely have a background in treasury management but the nature of the current crypto ecosystem means these innovators need guidance Siemer told PYMNTS in a recent interview Bottom line Projects raise money to build a product not to speculate on the prices of crypto he said That volatility is an important consideration given that most of a blockchain or crypto startups expenses will be in fiat currency Siemer said Organizations that hold onto their Ether ETH or bitcoin BTC after an ICO are greatly exposed to that threat of volatility Weve seen some ICO project treasuries fall by 80 percent or more resulting in significantly less runway for building out their product and business he continued Theres also the major challenge of access to bank account services for companies with significant volumes of cryptocurrencies Traditional financial institutions FIs have been historically reluctant to bank companies managing cryptocurrencies particularly with regulations surrounding the crypto ecosystem largely undefined and unclear Its another gap in the market giving rise to FinTech firms addressing this issue One startup Bitwala announced this week that it raised 4 million to provide traditional banking services for cryptocurrency signaling at lease some interest among traditional banks to work with crypto In addition to these hurdles Genesis President Cory Klippsten told PYMNTS that there are a range of other issues that companies face when they lack advisory services for their crypto operations or following an ICO Crypto is very different from the traditional startup world he said Everything is open source meaning that any feature in a public blockchain can be copied He touted the network surrounding these projects as a paramount priority for companies Most blockchain startups are protocols or platforms so they have a community to build before they even get to end users Klippsten continued They are essentially engaged in platform wars from the word go Furthermore many of these projects raising funds lack the resources and internal staff to manage that pressure or other more typical challenges like marketing and branding Both Klippsten and Siemer emphasized that these hurdles will persist and evolve for crypto and blockchain startups even as the market shifts toward legitimizing cryptocurrencies Siemer pointed to Goldman Sachs consideration to offer custody for cryptocurrencies according to unnamed sources in Bloomberg last month This followed the formation of Komainu a custody consortium formed earlier this month which includes top traditional FIs such as JPMorgan Chase and The Bank of New York Mellon As the traditional financial services FinServ market continues its exploration of custody and other crypto services and as FinServ regulators consider how to protect investors and innovators without stifling innovation crypto firms are going to need guidance as they navigate the industry and raise more funds via ICOs Genesis plans to offer a full suite of treasury management services including audit and tax reporting investment management and custody and liquidity services for the industry According to Klippsten adequate treasury management that can handle the unique challenges of the crypto market wont only be essential for the new market entrants Assuming crypto will be an accepted payment system corporates will need to handle their exposure to their clients in payments and other aspects he said On top of that their clients crypto exposure will also affect decisions made Related Items B2B B2B Payments Blockchain Cash corporate treasury cryptocurrency Genesis ICO liquidity News regulation risk Startup treasury Wavemaker Partners