With the blockchain industry increasingly beleaguered by fraud schemes disguised as initial coin offerings, a Swiss lobby group is looking to stamp out wrong-doers.
Switzerland, along with Hong Kong, the U.S., and Singapore one of the largest hubs for initial coin offerings, is setting up a rulebook for the fund-raising method, the Crypto Valley Association said on Thursday. The industry group has drafted a code of good conduct for legal, moral, and security concerns surrounding ICOs, it said.
«With the explosion of innovation surrounding blockchain and cryptocurrency technologies, it is unsurprising that organizations are leveraging similarly innovative financial instruments to raise capital,» CVA head Oliver Bussmann said.
Swiss Dispute
The code is aimed at organizations planning an ICO and covers aspects of transparency of fund-raising to less technologically-savvy investors, as well as detailing how funds will be used, how the technology and the tokens work. The Swiss financial regulator said last year it had already rooted out several fraudulent coin schemes which took in millions.
Tezos, where a Swiss foundation and the U.S.-based couple which owns the coin technology are battling for control, is another example where investors have been wrong-footed due to lack of information. The project faces three class-action suits lodged by disgruntled investors in the July ICO, the largest ever to-date.
Asia Acts
In Asia, Singapore's regulator has sprung into action, recently publishing guidance that clarifies the local regulatory situation regarding digital token sales. Singapore-based businesses that have run token sales include gold price tracker Digix, which raised $5.5 million, and e-wallet provider TenX, which raised $80 million in less than seven minutes.
Meanwhile, Hong Kong's fintech association issued its own paper on tokens, with guidance on what it sees as best practices for token sales.
