Ryan Taylor

Cryptocurrency experts weigh in on ICO upheaval

Recent ICO-related news from South Korea, Switzerland and even the Trump administration have got the cryptocurrency industry talking. Here are their thoughts.

Perry Woodin

Perry Woodin, CEO of Node 40

“Switzerland and Korea have a decidedly different take on what to do about ICOs. Where Korea has followed China’s lead by imposing an outright ban on ICOs, Switzerland is taking a more moderate approach. The Swiss FINMA Announcement mirrors the SEC’s bulletin where ICOs will be covered by existing securities regulations. ICOs seem to have a great deal of potential. As regulatory guidance becomes more clear, we should see the entire ICO market mature into a useful vehicle for raising capital.”

Ryan Taylor

Ryan Taylor, CEO of Dash

“Because the digital token market is so new, I believe that many investors lack the necessary sophistication to assess or appreciate the viability, sustainability, and governance of projects that are raising hundreds of millions of dollars in capital.

“Such an environment is ripe for abuse, fraud, and waste. Just because the technology is new, bad actors may assume they could abuse investors, so it is reassuring that the FINMA stands ready to investigate abuse and regulation breaches that have harmed investors. Guidance from FINMA will also serve to prevent well-intentioned projects from unintended violations.”

Oliver Bussmann, President of the Crypto Valley Association (CVA) in Zug, Switzerland

“The FINMA announcement is in accord with what we have been saying at the CVA. FINMA clearly states in its guidance that it supports the innovative potential of blockchain technology, but also that, depending on the structure, regulation can and should apply. We think this is another sign of the Swiss regulator’s clear and balanced approach to blockchain and fintech.”

Nolan Bauerle, Director of Research at CoinDesk

Nolan Bauerle, Director of Research at CoinDesk

“An important point to note is that recent regulatory crackdowns in South Korea and Switzerland involve ICOs for so-called alt-coins, and do not apply to Bitcoin or ethereum. The SEC, in its ICO guidance this past July, noted that

“The SEC, in its ICO guidance this past July, noted that ethereum itself was a currency and not a security and elaborated on the test needed to distinguish between the two. While the supply of many ICOs has been questionable, there are two forces at work:

    1. The first is market-based from the growth of analysis of key price indicators that emerged from a new professional buy-side in cryptocurrencies. The effect of this market approach will likely be positive for the quality of new tokens.

The other force is regulatory, and will likely have an effect on the quantity of ICOs in the market.

“The regulatory approach creates challenges for the regulators themselves. This is a big test of whether regulators can ban or restrict anything cryptocurrency. Cryptocurrencies empower individuals and challenge the legal idea of jurisdictions. These are important forces behind the success of cryptocurrencies. Regulators have lots of work ahead to achieve the kind of compliance they’ve signalled.”

Serafin Lion Engel

Serafin Lion Engel, CEO of DataWallet

“I think that the FINMA statements set exactly the right tone. The agency appreciates the innovative potential of ICOs and is cognizant of the groundbreaking implications of the technology ICOs are driving. This is great news for every company that actually wants to change the world by building the technology they stated and through that provide value to their token holders.

“This type of regulation will seed out fraudulent players, therefore reduce the level of noise in the ecosystem, and help legitimate companies rise to the top.

“The only players who should be very afraid by the statements of FINMA are criminals looking to defraud potential investors who would otherwise invest their money with companies looking to build the next generation of the internet. Enabling buyers to make informed decisions critically includes introducing regulatory barriers to seed out companies looking to defraud potential token purchasers or engage in illegal activities such as money laundering or terrorist financing.

“A ban on ICOs, on the other hand, such as that introduced by China and South Korea is simply a naive solution for a complex problem. It is shockingly shortsighted and will inevitably lead to a brain drain of innovators who will now set up their operations in a different jurisdiction.

Angel Versetti

Ambrosus CEO Angel Versetti

“The announcement from FINMA validates the prudent policy Ambrosus has taken in our TGE with the enforcement of strict KYC requirements for all participants. Astute observers recognize that the sector is becoming increasingly regulated and that companies which hope to thrive in the future and to be considered legitimate players in the industry will need to be compliant with appropriate rules and regulations.

“There have been those who have questioned our strict policy, but we look at today’s announcement as an affirmation of our prudence to date, and consequently, we believe that Ambrosus will be considered an example of how to properly and compliantly conduct a TGE in the future.”

Trevor Koverko

Polymath CEO Trevor Koverko

“China is the influencer in Asia; after they moved on the ban, the pressure was on for everyone else in the region. But the market largely shrugged this off. The smart money is betting that these bans are a temporary band-aid until more thorough regulations are thought out.”