In a move to standardize Initial Coin Offerings (ICOs) or token sales, Gibraltar’s government and Gibraltar Financial Services Commission (GFSC) have announced their decision to release regulations around the launch of ICOs.
At present, ICOs present a risky and unregulated funding system for new tokens trying to raise capital for their blockchain-based technologies. According to Coindesk’s ICO tracker, from January 1st 2016 to December 31st 2017, cumulative ICO funding has grown from $0.04BN to $5.68BN. An increase of almost 100% from 2016.
China has completely banned ICOs and very recently, Dallas-based AriseBank, a platform calling itself a decentralized bank offering its own cryptocurrency with which to purchase several of the bank’s products, was shut down by the SEC in its ICO phase on scam allegations. The ICO had raised $600MM of its $1BN goal at the time of being shut down.
“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,” said Sian Jones, a senior advisor to the GFSC, according to Reuters.
Since risks exist on the side of the coin issuers as well as that of the investors this move to regulation presents a healthy transition towards a safer investment environment for both parties. Indeed, a beacon for greater structure in a wide-open sea change.