ICO (Initial Coin Offering) projects have been struggling hard over the recent years to achieve their ultimate business objectives due to various issues like scams, lack of transparency and lack of awareness about crypto market values. This gives rise to the birth of innovative trends in crypto regulations in the year 2019, which are listed as follows:
Invasion of institutional money has boosted up the credibility of ICO projects. Moreover, it has paved a way for the quality ICOs to acquire huge funds, as ever seen before.
Global regulation metrics help projects to thrive into the path of international crypto regulations, instead of being fitted inside the existing legal boundaries of respective countries.
Influx of IEOs (Initial Exchange Offerings) has made AMLs, KYCs and some other compliance strategies to be in-line with the crypto market’s regulatory needs, since exchanges take the partial responsibilities of the token sale events in this case.
Entry of STOs (Security Token Offerings) imported additional safety and security to the ICOs.
Arrival of professional ICO management platforms has made the management process (both before and after the sale) of a crowd funding event simple, easier and bit more customized than before.
Boom of ICOS and the need for regulating them:
ICOs arrived into the crypto market by the year of 2013 with the launch of ‘Master coin’. At the start of the year 2016, a study revealed that around 8.8 billion US Dollars have been raised via ICOs.
While getting to know this fact, numerous IT enterprises had started showing their interest in organizing fundraising events. Also, the worth of ICOs got much more enhanced after Telegram’s colossal success with an outstanding fund rising rate of around 1.7 billion US Dollars.
The continuous innovations and improvements in technology and digital assets are meritorious on one side, but have brought increased risks of fraudulence issues on the other side. Such risks associated with the initial coin offerings multiply on a daily basis, as the crypto market in our country is not yet regulated enough unlike the other traditional capital markets. Thus, as a result, the regulatory systems were established to eliminate the risks appropriate to the crowd funding concepts.
Every crowd sale ICO event should fall within certain regulations to make its operations legal and successful. Here, the regulations denote a specific set of rules that define the dos and don’ts while running ICOs. It has been strongly suggested that the exploitation rates in ICO launches can be reduced only when the ICOs try to be strictly compliant with the necessary regulatory standards.
One of the important regulatory paradigms for ICOs that need to be cited out is the demystification. In the recent past, many start-up companies viewed ICOs only as disruptions for the venture capital sector. But now with the immense momentum gained by ICOs, companies realized that they are the effective means of raising funds for a business. Also, they have started believing the fact that the lack of regulatory oversight would certainly lead a business to a risky path.
Also in the past, ICOs were pushed into some uncertain pitfalls due to the absence of clear regulatory regimes. But at present, the situation has been changed with the introduction of certain legal regulations from the Governmental side. Of course, the Government is now insisting both the investors and token offering companies (involved in an ICO project) to be more cautious in abiding perfectly with the regulatory rules to eliminate the risk factors.
As far as the Indian Government is concerned, ICO regulations have been revising and improvising the financial sector at a rapid rate. Also, while considering the present market scenario, the latest trends and developments in ICO regulations bear a strong potential in directing our businesses towards the path of righteousness, thereby helping us to attain our desired goals and profit rates. Hence without any doubt, it has been made clear that the ICO landscape is growing with a mature phase in 2019, together with the fortified regulations.
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