Is the US the Most Favorable Country to Start an ICO?

Cryptocurrency regulations differ every now and then. There are scenarios wherein countries ban crypto-related activities completely. On the other hand, there are those countries that decided to simply regulate the industry.

John McAfee who is a huge fan of cryptocurrencies last month decided to have a change of heart when it comes to ICOs. He wrote that he was “no longer working with ICOs” nor would he be recommending any of them. He mentioned that “those doing ICOs can look forward to arrest”.

US Securities and Exchange Commission may have considered Bitcoin and Ethereum not as securities but this isn’t the same for ICOs. ICOs are facing tough regulations. However, according to a study, the US was ranked as the “most favorable” country where a company could launch an ICO (initial coin offering). That is quite surprising considering the pressure from the US SEC.

How Was The Conclusion Made?

The study has Switzerland and Singapore ranking second and third respectively. Also, the report also mentioned Russia, Estonia, and the UK as countries that show promising climate where companies can launch their ICOs.

But how exactly did the method come up with this conclusion? Unfortunately, the methodology could actually be flawed. Crypto Finance Conference analysts made use of data coming from top 100 ICOs by country. It basically means that the 100 highest grossing ICOs were ranked according to their country. Of the 100 ICOs, 30 of which came from the US while 15 came from Switzerland and 11 were from Singapore.

And for this reason, this study is quite misleading. Basically, the conclusion was made mainly according to the size and the amount of money raised by the ICOs. For instance, if you will take a closer look at Telegram, though it faced legal scrutiny, it was able to raise $1.7 billion.

The Need to Regulate ICOs

There is a need to regulate ICOs. Just in the first half of the year, ICOs were able to surpass the record from last year in terms of the amount of money raised via ICO. However, it is also true that the market is quite stricter these days.

In Japan, The Center for Rule-Making Strategies at Tama University has released a guideline regarding the rules and regulation of ICOs in April. It includes rules covering anti-money laundering, identifying investors, and even tracking project progress. And once Japan’s Financial Services Agency deliberated on these guidelines, it’s a possibility that it can actually become a law.

However, the report clearly states that ICOs are securities. It has the same position as that of the US Securities and Exchange Commission. According to its researcher Kenji Marashima, “ICOs are groundbreaking technology, so if we can implement good principles and rules, they have the potential to become a new way to raise funding”.

It is important to regulate the crypto market especially ICOs. According to a study, 1 in every 5 ICOs can be considered a scam. Now, it is important for regulators to also protect investors considering how easy it is for ICOs to just scam investors and run with their money.