The legality of initial coin offerings (ICO’s) has been a hot topic in recent years with the rise in popularity of cryptocurrencies. In the month of February 2018 alone, ICOs have raised $1,473.97M according to Coindesk’s ICO tracker.Governments and reserve banks face administrative and legislative challenges in the acceptability of risks involved with legalising ICO’s. With the banning of ICO’s in China and South Korea, once two of the largest cryptocurrency markets for ICOs, there is an increased spotlight on regulators globally to regulate ICO’s or back off without further regulation. In this article, we delve into large markets where ICOs are accepted and can flourish in 2018.European Union (EU)The EU’s existing regulatory framework in regard to Anti-Money Laundering policies and business regulations and licenses currently allows for ICOs.Guidance from the ESMA notes that “depending on how they are structured, ICOs may fall outside of the scope of the existing rules and hence outside of the regulated space”. EU regulation surrounding collective investment schemes are applicable for coins/tokens that qualify as financial instruments.United StatesICO regulations in the United States vary by state. Regulation of ICOs in the United States varies by state. On one end, some states have no regulation specific to ICOs, whilst on the other, businesses engaging in altcoin activities will require deposits equal to or in access of local transactions. On a federal level, ICOs are expected to be registered and licensed. The SEC takes a similar position to Canada in declaring that most ICOs are securities and may be subject to security regulation in the future.AustraliaAustralia is one of the first countries to formally launch ICO regulations. ICOs in Australia are required to adhere to the Corporations Act. Shares are to be tracked if they are issued. If the ICO offers financial advice to customers, they will also be required to acquire a financial services license.CanadaCanadian Securities Administrators ruled that “Cryptocurrency offerings involve sales of securities. Securities laws in Canada will apply if the person or company selling the securities is conducting business from within Canada or if there are Canadian investors”. Fintech projects that do not fit into the national regulatory frameworks, such as ICOs, are subject to regulations on a case-by-case basis.SingaporeThe Monetary Authority of Singapore decided that ICOs and altcoins that classify as “capital market products” must comply with applicable securities laws. Businesses or individuals providing financial advice in respect to ICOs and altcoins must also comply and be licensed under the Financial Advice Act.This article brought to you by John Daniel O’Keefe, a markets analyst with <MaxData.io, a new ICO coming out with a crowdsale this upcoming May. The company has developed a blockchain platform connecting consumers and service providers directly, allowing for a more efficient marketing process that will streamline and reduce costs of transactions.Image source
