Gibraltar To Create World’s First ICO Rules
While Initial Coin Offerings (ICOs) have caused issues around the world with government concerns about if they’re securities or not, Gibraltar announced it will create the world’s first set ICO rules.
According to a Reuters report, Gibraltar will introduce regulations for ICOs. Furthermore, these regulations could set the tone for what other countries throughout the world choose to do. So far, the U.S. applied existing securities rules to ICOs while China set a ban on ICOs.
The way an ICO works is that a company offers its tokens in exchange for cash or cryptocurrency investments. Traditional investing gathers funds in exchange for shares in the company as opposed to tokens, which are often called altcoins.
An incredibly popular way to fund ventures, ICOs raised $3.7 billion raised in 2017. This explosion in popularity caused governments and central banks became concerned about protecting ICOs investors.
The Government of Gibraltar along with Gibraltar Financial Services Commission (GFSC) will meet to draft a complete set of ICO guidelines. The regulations will cover the promotion, sale, and distribution of ICOs connected with the British territory.
Sian Jones, a senior adviser to the GFSC, said, “One of the key aspects of the token regulations is that we will be introducing the concept of regulating authorized sponsors who will be responsible for assuring compliance with disclosure and financial crime rules.”
Regulations establish disclosure rules so that anybody purchasing tokens will receive adequate and balanced information about the investment.
Other countries like Britain and Singapore look toward creating regulations for ICOs in the near future as well.
In many ways, clear regulations could relieve investors who have had the threat of bans or regulations lingering for months.