Taiwan Drafting National ICO Standards
The Taiwanese Financial Supervisory Commission is drafting a set of national standards for initial coin offerings. The regulator reportedly aims to make tokens as easy to invest and as liquid as stocks. The commission emphasizes that it “has no intention of curbing the creativity and productivity associated with cryptocurrencies if they are not used as securities.”
Taiwan to Regulate ICOs
The chairman of Taiwan’s Financial Supervisory Commission (FSC), Wellington Koo, has reportedly confirmed that the commission is drafting national standards for initial coin offerings (ICOs). The FSC aims “to make virtual tokens as easy to invest in as stocks and just as liquid,” the Taipei Times reported on Oct. 23.
At a finance committee meeting, Chinese Nationalist Party (KMT) legislator William Tseng asked Koo whether the government would regulate ICOs. Tseng pointed out that 127 ICO whitepapers worldwide were found last year to be fake, the publication described, adding that 80 whitepapers were found to be inaccurate as of April. The legislator also quoted findings from Satis Group showing that 81 percent of ICOs have been identified as scams.
The news outlet conveyed Koo’s reply:
The commission would regulate ICOs … [but] tokens exchanged for goods, such as those used in accruing points at convenience stores or mileage points accepted by airlines, would not be covered by the standards.
In May, China’s National Committee of Experts on the Internet Financial Security Technology, a Chinese government-backed industry organization, said it found 421 fake cryptocurrencies. Independently, the Wall Street Journal analyzed 1,450 ICOs and “found 271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.”
Taiwan’s Securities and Futures Bureau Deputy Director-General Tsai Li-ling was quoted by the Taipei Times asserting:
People often confuse an ICO with the trading of cryptocurrencies.
The governor of Taiwan’s central bank, Yang Chin-long, told the finance committee that “the government tends to regard cryptocurrencies as virtual commodities or assets rather than currencies, because they have no intrinsic value.” Tsai elaborated that “cryptocurrency trading is similar to trading in gold, for which the commission only implements money laundering controls.”
If a token functions similar to a security, “the commission would define it as a ‘securities token’ and subject it to the Securities and Exchange Act,” the publication quoted Tsai describing, adding:
The issuer would also need to disclose information similar to what companies that are publicly traded need to do now.
Regarding the time frame of the ICO standards, “The draft is to be completed by June next year,” the news outlet detailed, noting that “The commission has no intention of curbing the creativity and productivity associated with cryptocurrencies if they are not used as securities.”
“The more we regulate, the more this new economic behavior wanes,” Koo was quoted saying. In June, the FSC indicated that it intended to maintain only a limited oversight of cryptocurrencies and focus on anti-money laundering measures. In April, news.Bitcoin.com reported that Taiwanese bitcoin regulations are expected by November.
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