China and South Korea’s banning of ICOs and Japan’s changing of opinions on the acceptability of Altcoins has led to many nations taking an aggressive position in warning and protecting prospective investors. This also means that there is a greater unrest in the blockchain industry.
This changing political attitude has led many in the ICO world to take self-regulation seriously. One of the problems that many countries have with ICOs is that technically, they represent a regulatory workaround. The idea behind ICOs is that instead of seeking an initial public offering, businesses can seek seed funding in the crowdfunding market without the due diligence, regulatory requirements, time, or permissions a traditional IPO would require. This approach, however, encourages fraud and shady promoters.
China and South Korea both claim that the possibility of scammers using ICOs to defraud investors is the primary reason they have moved to ban the creation or selling of them in their countries. Meanwhile, the US SEC has issued an alert indicating that Blockchain based public companies may be engaging in pump-and-dump schemes to manipulate their market prices.
However, outright banning is not the only way that the governments are responding. Some nations are also seeking to regulate ICOs and give them a path forward to being a Legal ICO.
Swiss Government has indicated that they will bring regulations to close the existing loopholes. Thus, while many countries seek to dismantle the ICO ecosystem, others are looking to usher in the era of Legal ICOs.
There is a chance that most countries will eventually accept and regulate the ICOs. The question is that we have to ensure that we do not end up losing investment and innovation in this mad dash to regulate Blockchain tokens. One way to avoid it is to go with Legal ICO platforms and ensure that you are buying legal ICOs that are self-regulated.
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