In a rather swift move, Japan is leaning towards the legalisation of Initial Coin Offerings, despite other countries banning, or at least restricting them as they are too high risk.
These guidelines have been laid out by a government backed study group, and looks at further adoption of ICOs, including rules for identifying investors, preventing money laundering, tracking progress of projects and protecting existing equity and debt holders.
These guidelines are a stark contrast to the views shared by China and South Korea, who have banned the practice entirely.
So why is there so much drama that surrounds ICOs? Well people are put off them as they believe them to be fraudulent scams. This is true for some ICOs that are started, but not all of them. The report released by this government backed study group, also says that ICO issuers need to clearly lay out how the raised funds, profits and assets will be distributed among the owners of the tokens, equity and debt. The report says;
“The ICO Business Research Group proposes the above principles as the minimum principles that should be satisfied at this time…To enable ICOs to be used safely by a wide range of issuers and investors and to be accepted well in the society, more detailed rules may be required.”
ICO’s are particularly favourable among those who are looking to get funding for their blockchain startups. Since the start of last year, ICOs alone have raised a $8.8 billion; however, they have received a lot of negative attention as they are just so unregulated, which means that there is little accountability. Many projects have turned sour, as the managers simply walk away from them, or do not deliver on all of their promises.
This has not dented the views of this study group, or in fact those who are willing to invest in the ICOs.