The ICO market is helping startups gather millions of dollars’ worth of investment, but governments and professionals related to the financial sector all have one complaint against such a form of fundraising. They complain that ICOs are very unregulated as ICOs provide the investors with an opportunity to invest in a new startup and get digital tokens in return. These digital tokens have no existing framework as of now. Anyone with the required programming skills and contacts can set up a digital token through the blockchain networks.
The decentralized and unregulated nature of ICOs provides for a very dangerous method of raising funds, which can provide criminals and fraudsters a method to launder money. The troubling part is that all of this can be done in the name of an ICO. Therefore, the unregulated nature of ICOs has caused a number of governments, including the Chinese, Moroccan and South Korean governments, to put a ban on ICOs and guide investors to avoid taking part in such activities.
One particular solution to this problem is to introduce regulations in the ICO market, which would promote a healthy way for the startups and companies to raise funds through ICOs. GBX is one of the leading exchanges in this field and will be launching in January 2018.
GBX will be launching in the British Overseas Territory of Gibraltar where they are planning on regulating the ICO market by providing detailed guidelines for ICOs. Gibraltar’s Financial Services Commission released a draft of the regulations in October and will be strictly implementing the new regulations beginning in January 2018.
Gibraltar’s Minsters for Commerce, Albert Isola, stated:
“I am delighted and excited in equal measure to publish this legislation today, after an extended period of thinking, consultation and review with the industry and experts in this field.”
The Chief Executive of Gibraltar Financial Services Commission, Samantha Barras, added:
“Today’s publication places Gibraltar at the forefront of the regulation of Distributed Ledger Technology businesses and is a wonderful example of what can be achieved through greater collaboration among industry, government and the regulator.”
Gibraltar’s move has been positively hailed by the cryptocurrency market, as it provides blockchain firms a safe heaven where they can shift their operations to in case their native countries start to take action against cryptocurrencies. Singapore has also recently released a framework for ICOs with the intention to apply certain security laws on them.