ICO Alert puts HQ in Pittsburgh, CEO wants to make city a cryptocurrency hub
Rob Finch wants to make Pittsburgh a hub of cryptocurrency businesses.
And he's putting his company where his mouth is.
Finch, CEO of ICO Alert , announced Wednesday that his company was establishing its headquarters in Pittsburgh. The company leased space in Nova Place on the city's North Shore.
“We see Pittsburgh as this gem on the East Coast that we want to make a hub of cryptocurrency,” Finch said.
ICO Alert has four employees and is looking to hire five or six more. Finch hopes by this time next year, the company will have 20 employees based in Pittsburgh.
Bitcoin and Ethereum are the most well-known types of cryptocurrencies, digital forms of money that exist outside the regular banking system. But companies can offer their own cryptocurrencies as a way to raise money. Those currencies increase or decrease in value depending on how successful the company is, and there are online exchanges where the currencies are bought and sold by investors.
That is where ICO Alert comes in, Finch said. ICO Alert lists initial coin offerings and offers marketing and promotion services to companies seeking to raise money through initial coin offerings. An initial coin offering, or ICO, is a way open-sourced software companies can raise money, Finch said. It functions like a hybrid of crowdfunding campaigns and venture capital. The cryptocurrency could represent a slice of ownership in the company or a token to use whatever it funded, Finch said.
Finch said ICOs have raised more than $2 billion this year. ICOs can raise between a couple million and hundreds of millions of dollars, Finch said. ICO Alert lists more than 2,000 initial coin offerings.
As ICOs spread, so does the risk of fraud and scams, according to the U.S. Securities and Exchange Commission. The SEC released in July an Investor Bulletin warning of the risks of ICOs. The bulletin notes that ICOs can be fair and lawful but can also be shams.
The SEC filed charges against two ICOs in September. The companies, REcoin Group Foundation, a purported real estate firm, and DRC World, which allegedly dealt in diamonds, told investors to “expect sizeable returns from the companies' operations when neither has any real operations.”
As for making Pittsburgh a cryptocurrency hub, the city has given Finch a head start. Bitcoin ATMs have started to pop up. Cryptocurrency classes at Carnegie Mellon University are popular. The National Energy Technology Laboratory in the South Hills has funded cryptocurrency-related projects, and several area banks are working on related initiatives. The University of Pittsburgh is home to Ledger, a peer-reviewed journal devoted to cryptocurrency and blockchain technology.
Aaron Aupperlee is a Tribune-Review staff writer. Reach him at email@example.com, 412-336-8448 or via Twitter @tinynotebook.