On April 6 , 2018 CryptoBnB announced the cancellation of its onging ICO.
In an email sent to ICO token buyers CryptoBnB cites the recent change in regulations that would affect the use of its cryptocurrency in a number of countries as the root cause of their decision.
"The ICO is over due to recent changes in regulation. Our legal advisers advised us that the uncertainty is too high now due to the ambiguity in laws. Most exchanges have canceled their agreements and not taking any new tokens. Therefore we decided to cancel the ICO."
The ICO refers to the recent Securities and Exchange Commission (SEC) announcement four weeks earlier where the SEC put cryptocurrency exchanges on notice for alleged violations of federal laws governing securities trading. The SEC has evaluated ICO tokens as securities and as a result any cryptocurrency exchanges that list ICO tokens are operating security trading platforms outside of existing regulatory oversight.
The SEC statement states:
“If a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
As a result , several exchanges operating in the U.S. have canceled their agreements and are not taking any new tokens. The SEC is wary of the risks posed by cryptocurrencies that could result in financial instability and the fact that cryptocurrencies can be used for fraudulent purposes (eg. money laundering). Also, regulatory oversight in some other countries appears to be in a state of flux. For example, China increased its regulations recently banning initial coin offerings (ICOs) and cryptocurrency exchanges.
While CryptoBnB operates based in the Gulf Region its biggest timeshare and short term rental market is in the US and its territories. The difficulties of added regulatory oversight of initiating operations in the US led to CryptoBnB's ICO cancellation. Additionally, the ICO had reached its softcap but with depressed Ethereum prices the start up softcap funds had been cut in half in value.
The cancellation of CryptoBnB's ICO along with U.S. cryptocurrency exchanges cancelling token listings is an ominous sign that governments and central banks are attempting to more tightly regulate cryptocurrencies.
For CryptoBnB the uncertainty of operating in the U.S. with its token and the changing regulatory oversight led to their decision. CryptoBnB moved quickly to refund investors' Ethereum within 1-2 days and decided to refund fully to avoid any legal complications.