How Countries Regard ICO
Unfortunately, ICO do not meet the investors’ expectations every time. There are cases when a project ceased existing suddenly and made off with the invested funds. Situations of this kind have drawn attention of many countries’ authorities and raised numerous questions. Some governments are convinced, there is an urgent need in regulation mechanisms to protect investors against losing funds.
Full-fledged laws and rules for ICO haven’t been set up in the most of countries yet there were some statements on the problem.
Here is how various countries approach the matter of ICO.
Last year China has claimed it totally forbids ICO. The ban was voiced by the People’s Bank. At that time it equated ICO and illegal financing tool which caused prohibition of suchlike crowd-funding campaigns.
On the heels of China South Korea declared ICO banned. The country’s commission on financial services has reported, the measures are to protect investors against the increasing fraud risks from ICO.
In February 2018 Russian government has released a document with established rules for ICO licensing. To control altcoins registering and taxation matters there were orders issued later. Yet ICO itself is not banned in the country though there are plans to establish a set of rules for its regulation.
Australia was the first country to raise requirements for ICO. The authorities were sensitive enough and elaborated guiding principles backed by the country’s legislation. As the government says, adopted actions allowed for guarding Australians from fraud.
Gibraltar has started preparing ICO regulations recently together with the Financial Services Commission. The main objective of the draft is regulating promotion, sells and distribution of digital tokens. The idea of “authorized sponsors” will be taken as the basis for the bill, they are meant to be responsible for rules of data disclosure and financial crimes.
Abu Dhabi has announced in 2017, it is considering ICO as “conditioned investments”. It also started drafting a bill in February this year to regulate ICO.
The US government and the Securities and Exchange Commission (SEC) have declared, ICO regulation is urgent. As SEC sees it, ICO are full featured securities and all ICO in the USA are obliged to be registered and licensed. Only after the two stages completed successfully the project is allowed to enter the market.
Last summer Canada claimed, ICO will be regulated within the framework of securities legislation. The country’s citizens who wish to launch ICO projects must address CSA and get approval for promotion. Measures taken by the Canadian government do not imply direct ICO regulation.
Germany did not elaborate specific laws for ICO either. The authorities are aimed at taking control over such projects through Law on Banking, Law on Investments, Law on Payment Services Supervision and other acts.
In November last year Singapore has composed a code of conduct for ICO regulation in accordance with the already existing Securities Law.
The European Union has come up with opinion that any ICO must comply with the requirements of existing legislation. The basic demand regarding ICO was that a project has to meet the Anti-Money Launching / Know Your Customer policy.
Japan, the country that has made cryptocurrencies legal, did not adopt any significant actions for ICO having just warned investors, putting up into these projects is way too risky affair.
In the UK the government did not impose a ban on ICO, yet has claimed, existing laws and rules must take control over it. Of course, there was something about ICO risks warnings as well. Financial regulatory body has noted, some projects may disorient would-be investors or simply cash in on their funds.
In Taiwan the government is determined to develop ICO, blockchain technologies and provide legal assistance for the industry.
In Malaysia financial bodies warned investors, they need to see into ICO thoroughly before putting up their funds into it.