Excitement As Taiwan Plans ICO Regulation To Facilitate Growth Of The Sector

Fraud and lack of authenticity cast initial coin offerings (ICOs) in a very bad light. Since their rise, many countries placed bans in place to stop rampant scamming of unsuspecting investors. However, there is fresh excitement as Taiwan plans ICO regulation as reported by Taipei Times.

According to the news outlet, the Financial Supervisory Commission (FSC) is preparing a set of regulations for the sector. The paper quotes the FSC Chairman who was speaking to the Legislative Yuan’s Finance Committee. Wellington Koo, the Chairman, said that the preparations are in advanced stage and could be ready by mid-2019.

Reportedly, the comments came after Chinese Nationalist Party (KMT) Legislator William Tseng raised the issue. As per the legislator, most of the ICOs floated in the past wound up to be fraudulent. Therefore, the legislator wanted to know if against the background, FSC would draw up regulations.

Also, the comment arises from the fact that most countries instituted ICO bans given their nature. Most countries are unable to correctly categorize ICOs and therefore prohibit investments in them.

However, Koo insisted that: FSC “has no intention of curbing the creativity and productivity associated with cryptocurrencies if they are not used as securities.”

The regulation will be conditional on the fact that cryptocurrencies do not operate as securities. In the event that a cryptocurrency operates as a security, it will be subject to the Securities and Exchange Act. This way, the digital asset will fall outside the purview of the FSC.

Speaking at the same occasion, the governor of Taiwan’s central bank, Yang Chin-long said: “The government tends to regard cryptocurrencies as virtual commodities or assets rather than currencies, because they have no intrinsic value.”

Further, the governor said that once a token function similar to a security, the Securities and Exchange Act will apply. In particular, the Act states that: “The issuer would also need to disclose information similar to what companies that are publicly traded need to do now.” Taiwan’s move will go a long way in bringing regulatory clarity in a sector that is just getting off the ground. As Taiwan plans ICO regulation, it will be a slap in the face of mainland China which banned crypto-related activities.