Is Russia Planning To Ban ICOs Like Philippine And Others?

Initial Coin Offerings (ICOs) have become so popular lately and this has raised concerns among authorities in various countries with some of them even going as far as instituting bans against ICOs. Russia however seems to be taking a more lenient path following recent reports that its Finance ministry is working on regulation of ICOs and cryptocurrency while regulators in the Philippines are determined to ban ICOs from operating without approval.

The Russian Ministry of Finance published a new proposal on January 25th highlighting its requirements for any projects that plan on launching ICOs. The proposal also highlights guidelines and requirements that should be followed by any investors that wish to take part in token sales. Meanwhile in the Philippines where cease-and-desist orders were filed by the Securities and Exchange Commission against four firms that were reportedly operating ICOs without securities and regulatory approval.

There is currently no regulation for ICOs in the Philippines but it seems that the authorities are not about to let the lack of regulation present an opportunity for firms to take advantage. The lack of regulations might prompt the Asian country to consider coming up with regulations for such situations just like the ones being considered in Russia.

The proposed regulations in Russia are expected to pass through legislative bodies before they are passed into law. They will also feature no investment limit cap for licensed professional investors as per the country’s securities law. However, there will be an investment cap of roughly 50,000 ruble or $900 per token for every investor that is not registered as a professional. Additionally, the proposed regulation will require all ICO organizers in Russia to reveal some information to the governing bodies as part of making sure that they are fully compliant.

Some of the information that they will be required to disclose includes the name of the website as well as a network provider, the name of the token issuer, and the organizer’s permanent working bodies. The regulation might also have the power to block any promotional activities before the planned ICOs.

A section of the proposed law states that: "Prior to the publication of an offer for the release of tokens, the tokens that are issued may not be offered to potential purchasers in any form or by any means using advertising."

The proposed draft highlights the country’s latest endeavor towards ensuring some degree of regulation in token sales. The move is reportedly based on instructions issued by President Vladimir Putin in October last year. It also highlights one of the comments made by a lawmaker in December 2017 stating that there have been talks about the introduction of new regulations for the cryptocurrency market in Russia.

Russian authorities believe that legalizing cryptocurrency and employing regulatory measures such as the recently suggested ones for ICOs is a better route to go through than instituting a ban like some countries have done. China and South Korea are some of the countries that have completely banned ICOs due to the high risk of fraud that they entail as well as the speculative nature of cryptocurrency which has led to worries about a bubble.