Taiwan FSC: ICO Regulations Could be Friendly When Tokens are Not Used as Securities
The Financial Supervisory Commission (FSC) of Taiwan is drafting national standards for initial coin offerings (ICO). The regulation authorities are aiming to build a suitable environment for cryptocurrency trading and hoping one day, the virtual tokens can be invest as liquid as stocks according to Taipei Times.
As ICO is still in its early stage, a mature legal framework has not been build up yet. There are a lot of financial scams using the name of ICO, and raise money easily through faked white paper. Last year, there were 127 fake white papers worldwidely. According to data from ICO advisory firm Satic Group, 81 percent of the ICOs have been identified as scams.
The Taiwan authorities are desire to boost local economy but also worries about the financial risks among those ICO projects. As thus, they are eager to legalized this space and impose effective but friendly regulations in order to boost the sustainable development of cryptocurrency and blockchain industry in the island.
Koo indicated that the FSC would regulated ICOs, but he also added that, “The more we regulate, the more this new economic behavior wanes”, so the commission has no intention to apply strict regulation on ICOs. Koo emphasized that,
“The commission has no intention of curbing the creativity and productivity associated with cryptocurrencies if they are not used as securities.”
Tsai Li-ling, the Deputy Director-General of Taiwan’s Securities and Future Bureau also commented in a telephone interview that,
“People often confuse an ICO with the trading of cryptocurrencies. An ICO is a type of public fundraising activity, whereas cryptocurrency trading is similar to trading in gold, for which the commission only implements money laundering controls.”
According to Tsai, if a token is functioned as a security, the commission would define it as a “securities token” and subject it to the Securities and Exchange Act.