Renren can circumvent a ban on ICOs by qualifying as a US company since it’s NYSE listed
Renren, the company that was once-hailed as China’s Facebook but has reinvented itself in recent times after losing China’s social battle, is doing an ICO — also known as token sale.
According to the whitepaper released by Renren, they will develop a blockchain-based open source platform that can record user interactions and trading behavior. And the token RR Coin will be used in multiple scenarios from rewarding users who contribute content to charging for advertising.
RR Coin has 1 billion coins in total, among which 40% will be used for ICO sale, 25% for the RR Coin Foundation, 15% will be given to the team for marketing and development and the remaining 20% for business expansion. “The project is going to raise 100,000 ETH,” said a Beijing-based ICO investor. “I think it’s highly overvalued. RR Coin is more like QQ coin of Tencent that is totally centralized. They are just selling a new concept to make users active again.” But it seems that new concepts work.
The plan is to develop a platform for social media that will allow other apps to connect with users ultimately rewarded with incentives for engagements, although it appears that the full whitepaper for the token sale has not been released yet.
China banned ICOs (and bitcoin) last year, but Renren can qualify as a U.S. firm since it is listed on the New York Stock Exchange. While that might circumvent the Chinese ban, it is sure to raise attention among the SEC, which has already taken action against ICOs that violate securities laws.
Launched in December 2005, Renren with its Facebook-like features and its popularity among students in the early years, has seen a rise of new players such as microblog platform Sina Weibo and Tencent’s mobile app Wechat. Unlike the two blooming products, Renren is losing traction in appealing to the new masses of Chinese Netizens. The only solution is constant product innovation. And the social company decided to turn its strategic attention to the blockchain industry.
Renren’s stock spiked around 19% in reaction to the news.