/ ethereum

Regulators In North America Have Their Eyes on ICOs

After the ICO crackdown in China the world has been waiting with baited breath to see what North American countries will do regarding initial coin offerings. If the United States bans ICO's it could have a major impact on the crypto world, and especially Ethereum, the platform used to launch the ERC-20 tokens most ICO's flock to.

Last month market watchdogs North American Securities Administrators Association (NASAA), which includes representatives from Canada, Mexico and the United states, published its yearly Enforcement Report. The report cointains all the usual breakdowns of the years activities, but it also includes a section on blockchain use.

The NASAA report indicates that that trading cyrptocurrencies poses significant risk to investors and further states:

Cryptocurrencies purport to store value in a distributed digital ledger, and are currently very popular as a means of raising capital for very early stage startups (usually referred to as an “Initial Coin Offering” or ICO). NASAA members are closely watching this emerging market.

It is unlikely that the United States will ban ICO's outright as China did. More likely is that they will deem them as securities under federal law and tighten regulations. This would mean more due dillegence and KYC (Know Your Customer) requirements for ICO startups. In my opininion, tighter regulation is a step in the right direction, it would just be nice if it didn't have to come from the government.