The association, which is headquartered in bitcoin-friendly Zug, Switzerland, and has support from the government, has begun developing a CVA-endorsed ICO Code of Conduct. This regulatory and best practices framework will be written by a multidisciplinary team that includes members of the legal, tax, cybersecurity, and communications sectors.
Noting that four of the five highest-grossing ICOs have been launched in Switzerland, the CVA announcement calls for the Swiss government to take a proactive, careful approach to ICO regulation. By clarifying the legal and tax status of tokens, as well as the moral obligations of ICO participants, the government will provide investors with a better understanding of the nature of their investment and its associated risks.
“The rapid development of token launches has raised concerns around stability and security, and as a leader in this field, it’s our responsibility to support the industry,” stated Crypto Valley Association President Oliver Bussmann in a media release. “The widespread adoption of this framework, combined with careful supportive regulation would bring stability to an exciting but uncertain trend in blockchain.”
Bussmann added that this call for regulation should not be construed as an attack on ICOs by the association. He says the CVA is excited about the potential that token sales offer to the investment industry, but they are concerned that the lack of regulation has left them without the support structures that have traditionally accompanied funding mechanisms.
The Crypto Valley Association fully supports innovation in the blockchain space. We believe that token sales represent an exciting, sound and innovative approach to raising investment capital. Therefore, we believe Switzerland should support this trend by developing clear, comprehensible, yet flexible regulation that clarifies the legal status of ICOs and the tokens generated.
As the statement alludes to, Ethereum-based cyber crime has become big business. A new report from blockchain-tracing firm Chainalysis states that cyber criminals have stolen more than $225 million in Ethereum-related attacks, primarily from phishing scams and exploits. The firm estimates that 10% of all ICO-marked funds end up in the hands of attackers.
Calls for regulation from within the cryptocurrency industry seek to avoid blanket bans on blockchain-based innovations, such as this week’s China ICO ban. However, critics of regulation worry that such rules, when they come, are often heavy-handed. New York’s infamous “BitLicense” forced many crypto startups out of the state, and new regulations from Washington state have had the same effect.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:15 AM UTC