What Would be Efficient Regulation for Initial Coin Offerings in the U.S.? PDF Download
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Author: Oscar Bruderer
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Initial Coin Offerings (ICOs) have been gaining popularity as an alternate way of funding through the issuance of tokens on a blockchain network. While this new technology has the potential to fundamentally alter the way in which the capital market operates, there is a lot of confusion as to what a token actually is and how it should be regulated. Since the tokens used in ICOs come in a variety of shapes and sizes, their status under securities laws is often unclear. For this reason, this paper will investigate whether different types of tokens used in ICOs fall under the definition of a security under Swiss, EU, and U.S. securities laws in order to ultimately determine how they should be regulated in the U.S. Based on legal analysis, we find that while the three nations define a security differently, they all struggle to set the boundaries in the case of utility tokens. Whereas Switzerland has the clearest regulation in this regard, U.S. securities laws are by far the most ambiguous when it comes to defining the legal status of a utility token. Finally, for tokens that meet the definition of a security, this paper argues that current securities regulations in the U.S. are not apt for facilitating the growth of ICOs. Therefore, the Securities and Exchange Commission should: (1) provide more clarity as to how they will regulate token sales, (2) create a safe harbor for token exchanges, and (3) create an exemption for token sales. Not doing so would prompt issuers from leaving to another jurisdiction which would make ICOs harder to regulate, chill innovation, and cause the U.S. to lose their spot as a global hub for this new form of raising capital.
Author: Oscar Bruderer
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Initial Coin Offerings (ICOs) have been gaining popularity as an alternate way of funding through the issuance of tokens on a blockchain network. While this new technology has the potential to fundamentally alter the way in which the capital market operates, there is a lot of confusion as to what a token actually is and how it should be regulated. Since the tokens used in ICOs come in a variety of shapes and sizes, their status under securities laws is often unclear. For this reason, this paper will investigate whether different types of tokens used in ICOs fall under the definition of a security under Swiss, EU, and U.S. securities laws in order to ultimately determine how they should be regulated in the U.S. Based on legal analysis, we find that while the three nations define a security differently, they all struggle to set the boundaries in the case of utility tokens. Whereas Switzerland has the clearest regulation in this regard, U.S. securities laws are by far the most ambiguous when it comes to defining the legal status of a utility token. Finally, for tokens that meet the definition of a security, this paper argues that current securities regulations in the U.S. are not apt for facilitating the growth of ICOs. Therefore, the Securities and Exchange Commission should: (1) provide more clarity as to how they will regulate token sales, (2) create a safe harbor for token exchanges, and (3) create an exemption for token sales. Not doing so would prompt issuers from leaving to another jurisdiction which would make ICOs harder to regulate, chill innovation, and cause the U.S. to lose their spot as a global hub for this new form of raising capital.
Author: Philipp Maume
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
Initial Coin Offerings (ICOs) are currently the hottest topic in the financial markets. They typically use blockchain technology to offer so-called 'tokens' that can confer various rights. Experts estimate that the amount of money raised via ICOs will reach US$ 20 billion by the end of 2018. Commentators have described the ICO bonanza as a new gold rush. Nevertheless, the legal framework for ICOs remains unclear because traditional securities regulation is designed for classical securities that are traded on a stock exchange. In late 2017, the US Securities and Exchange Commission released two statements that highlighted that tokens may be subject to US securities regulation if they meet the requirements for 'investment contract' as laid out in the Howey test. However, regulators in Asia and Europe remain quite vague on the issue. In this article we analyze the legal framework for ICOs in the European Union. It is our view that investment tokens (including hybrid tokens with some investment functions) are 'transferable securities' under Directive 2014/65/EU on Markets in Financial Instruments. Despite resting on a highly dissimilar definition, the financial markets law of the European Union, if applied correctly, applies to token classifications - this is comparable with the US Securities and Exchange Commission's approach. The result would be a similar framework in two of the most vibrant regions for ICOs. It would be a first step towards a harmonized application of securities laws to ICOs, avoiding regulatory patchwork and a possible 'race to the bottom'
Author: Quas Anita
Publisher: World Scientific
ISBN: 981120277X
Category : Business & Economics
Languages : en
Pages : 356
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Book Description
This book provides an updated view of new trends in entrepreneurial finance, with the aim of guiding academics and non-academics alike that want to gain a deeper understanding of this field.It collects recent contributions from scholars from all over the world. Each chapter provides new empirical or theoretical evidence on fundamental issues related to entrepreneurial finance, including business angels, crowdfunding, Initial Coin Offerings, Mini bonds, public support and more. Besides reviewing the recent trends in the field, the book also highlights new avenues for research, and implications for practitioners.
Author: Dominika Nestarcova
Publisher: BRILL
ISBN: 9004416587
Category : Law
Languages : en
Pages : 177
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Book Description
A Critical Appraisal of Initial Coin Offerings: Lifting the “Digital Token’s Veil” examines the merits of regulating initial coin offerings under traditional securities regulations and provides and in-depth analysis of digital tokens as a new asset class.
Author: Jelena Madir
Publisher: Edward Elgar Publishing
ISBN: 1035314754
Category : Law
Languages : en
Pages : 719
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Book Description
This fully revised and updated third edition provides a practical examination of legal and regulatory issues in FinTech, a sector whose rapid rise in recent years has produced opportunities for innovation but has also raised new challenges. Featuring insights from over 40 experts from 10 countries, this book analyses the statutory aspects of technology-enabled developments in banking and considers the impact these changes will have on the legal profession.
Author: Jay B. Sykes
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Author: Raghavendra Rau
Publisher: Springer Nature
ISBN: 3030651177
Category : Business & Economics
Languages : en
Pages : 888
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Book Description
This handbook provides the first comprehensive overview of the fast-evolving alternative finance space and makes a timely and in-depth contribution to the literature in this area. Bringing together expert contributions in the field from both practitioners and academics, in one of the most dynamic parts of the financial sector, it provides a solid reference for this exciting discipline. Divided into six parts, Section 1 presents a high-level overview of the technologically-enabled finance space. It also offers a historical perspective on technological finance models and outlines different business models. Section 2 analyses digital currencies including guides to bitcoins, other cryptocurrencies, and blockchains. Section 3 addresses alternative payment systems such as digital money and asset tokenization. Section 4 deals with crowdfunding models from both a theoretical perspective and from a regulatory perspective. Section 5 discusses data-driven business models and includes a discussion of neural networks and deep learning. Finally, Section 6 discusses welfare implications of the technological finance revolution. This collection highlights the most current developments to date and the state-of-the-art in alternative finance, while also indicating areas of further potential. Acting as a roadmap for future research in this innovative and promising area of finance, this handbook is a solid reference work for academics and students whilst also appealing to industry practitioners, businesses and policy-makers.
Author: James J. Park
Publisher:
ISBN:
Category :
Languages : en
Pages : 36
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Book Description
In addressing the problem of unregistered sales of digital tokens through initial coin offerings (ICOs), the SEC has proceeded through a strategy we call Regulation by Selective Enforcement. Rather than impose penalties on a significant number of violators, the SEC has brought a small number of significant cases. The SEC issued several extensive settlement releases that established without court intervention regulatory guidance about when ICO tokens are securities. The SEC has been able to pursue this strategy in part because there are multiple enforcers of the securities laws. State regulators and private plaintiffs have brought a significant number of cases against fraudulent ICOs, permitting the SEC to focus on developing issues of national importance. We conclude that while the SEC's Regulation by Selective Enforcement strategy has been thoughtful and successful, some aspects of the agency's approach are problematic.
Author: Stéphane Goutte
Publisher: Springer Nature
ISBN: 3030307387
Category : Business & Economics
Languages : en
Pages : 202
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Book Description
This book describes how the rapid advancement in encryption and network computing gave birth to new tools and products that have influenced the local and global economy alike. One recent and notable example is the emergence of virtual currencies (such as Bitcoin) also known as cryptocurrencies. Virtual currencies introduced a fundamental transformation that affected the way goods, services and assets are exchanged. As a result of its distributed ledgers based on blockchain, cryptocurrencies not only offer some unique advantages to the economy, investors, and consumers, but also pose considerable risks to users and challenges for regulators when fitting the new technology into the old legal framework. The core of this proposed book is to present and discuss the evidence on financial asset capabilities of virtual currencies. The contributors of this volume analyze several interesting and timely issues such as the particularities of virtual currencies and their statistical characteristics; the diversification benefits of virtual currencies; the behavior and dependence structure between virtual currencies and the financial markets; the economic implications of virtual currencies, their effects, their price risk, and contagion spillovers in a unified and comprehensive framework; the future of virtual currencies and their distributed ledgers technology.
Author: Cristiano Bellavitis
Publisher: Routledge
ISBN: 1351202138
Category : Business & Economics
Languages : en
Pages : 257
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Book Description
This book examines the proliferation of new sources of entrepreneurial finance and how these sources have the potential to make it easier for ventures to raise capital and grow. To date, entrepreneurial finance literature has developed a rich tradition of research on venture capital and angel finance. However, the emergence of ‘new’ sources of finance – such as crowdfunding – and the limited attention paid to ‘traditional’ debt financing and financial bootstrapping offer opportunities to explore, from different points of view and theoretical perspectives, the challenges that ventures face. The objective of this book is to explore these new and traditional sources of finance; suggest how these phenomena can be better understood conceptually; and guide new ways of understanding the topic in future, especially for researchers. The introduction outlines the new sources of entrepreneurial finance, and in comparing them with more traditional sources, proposes challenges in our conceptual understanding of these new and traditional sources. The subsequent chapters deal with important topics, including looking at the way different funding sources may interact; factors that impede family firms from getting external funding; how best to succeed with equity crowdfunding by looking at pre-selection processes; considering differences in perceptions towards funding sources arising from whether entrepreneurs are native born or immigrants; factors to consider when funding specialized assets in high uncertain sectors such as biotechnology; and the internationalization of business angel activity. This book was originally published as a special issue of the Venture Capital journal.
