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The respective financial regulators for Sweden and New Zealand have recently issued statements addressing initial coin offerings (ICOs).Â
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Swedenâs Financial Supervisory Authority [FSA] Has Issued a Statement Warning of the Risks Associated With ICOs
Swedenâs financial regulator has issued a statement outlining a number of risks pertaining to ICOs. The document describes âICOâ as a âterm used as the designation for launching a new token or other form of digital access based on⊠crypto.â
The FSA compares initial coins offerings to âgrassrootsâ financing activities, stating âthe purpose of an ICO is to raise funding from the public to develop a business idea for a completed business, not different from grassroots financing.â The FSAâs document highlights five areas of principle concern:
âNo Rightsâ â The FSA states that âmost ICOs are unregulated,â and as such are ânot under the supervision of⊠authorities. As a consequence resulting lack of âconsumer protections,â the FSA warns that there is â no guarantee that the token or cryptocurrency launched really gives the proprietor any kind of right or claim against the publisher.â
âNo Market Valuationâ â The FSA states that âthere is usually no requirement that the price⊠[of] a new digital asset is matched by a true market value,â and that the issuer âhas no obligation to allow any independent party to evaluate the digital asset.â
âNo Guaranteed Access to Secondary Marketâ â The FSA warns that there is âno requirement that⊠someone⊠will buy back the digital assetâ once it is distributed.
âNo Information Requirementsâ â The FSA emphasized the lack ârequirement for anyone launching an ICO to provide all essential information,â nor that said information is âprovided to all investors at the same time.â
âRisk of Investment Fraudâ â The FSA warns that âthe recent rapid increase in both the number of ICOs and their value can attract [developers] who have no interest in completing any project but are just looking for⊠money.â
New Zealandâs Financial Regulator Recently Addressed ICOs
New Zealandâs Financial Markets Authority recently issued a statement that seeks to encourage entities within the ICO and cryptocurrency industries to consult with the regulatory body regarding their legal obligations.
The FMA âstrongly encourages any businesses considering making an offer through an ICO to approach us early during their development phase.â The regulator asserts that the âspecific characteristics and economic substance of an ICO determine if itâs a financial product â if it is regulated, and if so how.â
The FMA also has released guides for individuals and businesses seeking to offer âservices such as cryptocurrency exchanges, wallets and brokering.â Such providers must âbe a member of a dispute resolution scheme, be on the Financial Services Providers Register, must comply with fair dealing provisions in the Financial Markets Conduct Act.
The FMA states that it âwants to facilitate responsible innovation, and ensure that the regulatory regime remains relevant and agile.â
What do you think of the regulatory positions of New Zealandâs FMA and Swedenâs FSA? Share your thoughts in the comments section below!
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The post Regulators of New Zealand and Sweden Issue ICO Statements appeared first on Bitcoin News.
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