When it comes to the world of cryptocurrencies, ICOs can be beneficial, as well as counterproductive. While there are a number of controversies that surround ICOs - it doesn’t appear that the ICO-craze is about to stop anytime soon. Governments from around the world are figuring out a way to control and regulate ICOs and it looks like Gibraltar will become the first country to legalize Initial Coin Offerings.
One of the hottest topics of discussion in international governance, ICOs are a controversial subject. The Gibraltar Financial Services Commission (GFSC) is the body which is working on drafting the laws and regulations which will eventually end up legalizing ICOs. It is the first ever government body to work towards legalizing ICOs.
“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 adviser to the GFSC, quoted by Reuters.
The government of Gibraltar is expected to discuss this law over the next few weeks once it is drafted. Gibraltar is a country notorious for their relaxed laws when it comes to gambling and other such controversial businesses. Tax laws in Gibraltar are known to favour these industries. Gibraltar is now looking forward to diversifying their financial sector - as the country is now issuing licenses to companies that make use of blockchain based technologies.
Legalization of cryptocurrency related concepts is a new frontier for international governments. Over the years, Japan has been one of the only nations in the world to legalize cryptocurrencies to some extent. The state of New York, as well as some provinces in Canada, have their own set of rules and regulations when it comes to cryptocurrencies. However, no country in the world has legalized ICOs as of now.
The government of Gibraltar has been considering doing this for quite some time now. In the past too, they had hinted at legalizing ICOs. In September 2017, the GFSC had stated that they were "considering a complementary regulatory framework covering the promotion and sale of tokens, aligned with the DLT framework."
The ICO controversy:
Over the years there has been a sharp rise in the controversies that surround ICOs. While Initial Coin Offerings allow developers to raise capital for developing their technologies in the form of cryptocurrencies, ICOs have been marred by a number of scams and Ponzi schemes which have been coming up. While the concept behind ICOs is that of raising money to develop a technology, it has sadly become an option for developers to raise money and scam the investors by eventually shutting down or disappearing.
China and South Korea are two of the biggest names in the world of cryptocurrencies to have banned ICOs. Moreover, even countries such as India have been considering the prospect of banning or regulating Initial Coin Offerings. Gibraltar has taken the first step towards legalizing ICOs, we expect more governments around the world to regulate and/or legalize ICOs eventually.