Is United States against ICOs
Aug 03, 2017 Posted / 5370 Views
ICO's are unregulated means of crowdfunding by means of cryptocurrency, like BitCoin. The ICO is used by startups to bypass the process of capital-raising required by venture capitalists and banks. It has helped many businesses to gear up in the market by providing funds to them. There are various ICO's like NXT, Ethereum, Lisk, Waves, Stratis etc. But it seems like that the USA doesn't quite like the idea of such funding, from such decentralized bodies. The US citizens are not allowed to invest or get funds from such ICO's, mainly due to regulatory reasons.
The USA government is not pleased with the idea behind ICO's because it does not have any central body to govern it or any responsible body involved in the procedures. It doesn't want its citizens to rely on such unauthorized ventures, which may get proved risky for them.
The ICO's are not regulated well, there is no code of conduct, guarantee, security over the funding processes, that is the main reason why the USA does not want its citizen to fall a prey to such ever changing policies of such organizations.
SEC(Security and Exchange Commission. governed by the US) has always been protective about the investors, that is why they impose many ban on various ICO's which have unclear intentions. SEC wants that ICO's must clearly state the points of the procedure so that the investors know what they are exactly buying into. It has already given warning that ICO's which are not registered, have unnamed profiles will become a thing of past quite soon.
SEC wants the ICO's to legitimize their process of crowdfunding, and provide the true facts to the investors before they invest in the ICO's. SEC wants the ICO's to enter the ecosystem and carry on with the crowdfunding services legally, providing proper facts and security to the investors.
Due to the long denial of their services in the USA, some of the ICO's have decided to ban Americans to avoid penalties imposed on them by the legal authorities and taxes levied on them. Therefore, to avoid such huge payments of fine and the getting into the legal hassles, some of the ICO's have themselves banned Americans.
SEC had issued a warning to all the ICO's that all the virtual offerings and tokens of the ICO's are a subject to the requirement of the federal security laws. Violations of the security laws by ICO's can lead them to legal matters, which may result in heavy loss or total shutdown, especially those who are not certified or authorized.
ICO's will continue to happen, if not in the USA then in the overseas. Bitcoin is unfazed by any vulnerability related to disaster and currencies. That why the game of cryptocurrency is quite strong, which is why it is often compared to Gold.
The MAS(Monetary Authority of Singapore) issued a statement similar to the US SEC that ICOs are vulnerable to money laundering and terrorist financing due to the anonymous nature of these transactions.MAS had published a statement in 2014 saying that while digital currencies were not regulated, intermediaries or exchanges would be regulated for money laundering and possible terrorist financing.
With the SEC decision to regulate ICO's, the investors have shifted their eyes from the USA to Asian markets. Asian countries are liberal with the thoughts of cryptocurrencies, where a Chinese bank has decided to launch its own cryptocurrency in near future.
SEC has confidentially allowed companies to file for IPO's, to boost the IPO's. This may trigger transparency advocates but still, it has allowed filing for IPO's secretly.
SEC has regulated a deal or an agreement for blockchain and ICO's that the companies should register as an exchange, broker/dealer, alternative trading system.
SEC wants the ICO's to predefine the laws, facts and security rules for the betterment of their investors.
In IPO's, the public offerings are sold to institutional investors, and in turn, they sell it to the general public, which becomes a public sector company.
SEC has always encouraged IPO's instead of ICO's, because of the regulated bodies governing them, providing investors with low risks.
The popularity of ICO's has led to the huge rapid rise of the ICO's in various locations around the globe. They are unconventional when compared to IPO's but have quickly risen a high level in a short span.
SEC has reduced the market for ICO's in the US, but it has still allowed the US based companies to collaborate with them outside the US regions.
US SEC wants its market to rise capitally, but their priority is to protect the investors against frauds, scams, money laundering etc. issues, which is why they have not supported the unregulated, decentralized bodies of ICO's to enter the US market, to avoid such financial calamities in the future.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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