Former CFTC Chairman Gary Gensler: ICOs Should be Considered Securities

Former chairman of the U.S. Commodity Futures Trading Commission (CFTC), Gary Gensler said that most tokens sold through Initial Coin Offerings (ICOs) should be classified as securities, Bloomberg reported Oct. 15.

Should cryptocurrencies be considered securities, they would fall under the regulatory purview of the U.S. Securities and Exchange Commission (SEC). Issuers of coins would have to comply with certain laws, register with the SEC, and disclose specific information like a description of the organization’s properties or financial statements.

When asked whether blockchain technology should be regulated, Gensler asserted that “we should be technology-neutral.” He continued, stressing the necessity to ensure investor protection within certain blockchain applications, such as cryptocurrencies. Gensler said:

“I think that cryptocurrencies like Bitcoin (BTC) need more protection, and probably more protection than even the oil markets.”

Speaking about future developments in blockchain regulation, Gensler said that there should be some sort of oversight — “traffic lights and speed limits” — to ensure confidence on “crypto roads.” Gensler said he thinks that the two will coexist, but “it will take a number of years to sort it through and get the balance right.”

Gensler’s words echo a statement from SEC Senior Advisor for Digital Assets and Innovation, Valerie A. Szczepanik, who said that “if you want [the crypto] industry to flourish, protection of investors should be at the forefront.”

Speaking at a U.S. SEC and CFTC senate hearing in February, SEC chairman Jay Clayton said that while every ICO token the SEC has seen so far is a security, a distinction should be made between tokens and major digital currencies such as BTC and Ethereum. The definition of ETH as a security has reportedly been questionable.

In December last year, Clayton issued a public statement, concluding that most tokens sold in ICOs are likely securities under U.S. law. Clayton then noted that the content of the transaction is more important than the form in determining if an investment is a security.

Korean Government Expected to Announce ICO Stance in November, Official Says

Korean Government Expected to Announce ICO Stance in November, Official Says

Regulation

The South Korean government is expected to announce its position on initial coin offerings in November, according to a high-ranking official. The decision will follow the outcome of the survey which the country’s Financial Supervisory Service recently sent out to domestic blockchain companies.

Also read: RBI Argues Supreme Court Should Not Interfere With Its Crypto Decision

ICO Stance Expected in November

Korean Government Expected to Announce ICO Stance in November, Official SaysHong Nam-ki, Chief of the Office for Government Policy Coordination, conveyed during a parliamentary audit on Thursday that “The Korean government is likely to announce its stance on the much–disputed status of initial coin offerings [ICOs] in November,” the Investor reported.

He explained that a survey on ICOs has been sent to local blockchain companies by the country’s Financial Supervisory Service (FSS). The FSS is responsible for setting some policies on cryptocurrencies including anti-money laundering measures. The aim of the survey is “to gather their [survey recipients] views on the current legal framework” for ICOs, the publication added. “We did the survey as some companies are conducting or preparing for ICOs despite the ban here,” Hong clarified and was further quoted saying:

We have had several discussions (on ICOs)…Once the survey results are in by end-October, we plan to finalize the government’s stance.

Money Today also quoted him reaffirming, “I intend to form a government position on ICOs next month.”

The South Korean government banned all forms of ICOs in September last year but has yet to introduce any law governing them. This has caused a number of Korean blockchain companies to launch their tokens abroad, providing the opportunity for domestic investors to continue to invest in ICOs.

Korean Government’s ICO Survey

Korean Government Expected to Announce ICO Stance in November, Official SaysThe ICO survey sent by the FSS has troubled businesses that received it, according to local media. Questions in the survey concern any ICO projects companies may be involved with or are planning to engage in, including reasons to issue tokens and their methods of distribution, the Korea Economic Daily reported.

While the FSS says that the survey is not mandatory and that it only seeks “to understand the exact situation of the industry, not for sanctions,” companies are reluctant to disclose certain information since ICOs are currently banned in the country, the publication noted. An official of a company that received the survey told the news outlet:

We have decided [that it’s] our internal policy to respond to [the survey due to] the concerns that it may be disadvantageous to be listed on the [government’s] blacklist if it is declined.

FSC’s Current ICO Stance

Meanwhile, the Financial Services Commission (FSC), South Korea’s top financial regulator, has reaffirmed its stance on ICOs for the time being.

Korean Government Expected to Announce ICO Stance in November, Official SaysFSC Chairman Choi Jong-ku.

“The government does not deny the promise of the blockchain industry,” FSC Chairman Choi Jong-ku was quoted by Yonhap saying on Thursday. However, “I do not think it is necessary to equate the virtual currency business with the blockchain industry,” he said, elaborating:

Many people say ICOs should be allowed, but ICOs’ uncertainty remains, and damage is too serious and obvious.

Choi also emphasized the need for more crypto exchanges to use the real-name system that the government implemented in January. The regulator aims to convert all crypto trading accounts to real-name ones. However, banks have only been providing the real-name conversion service to the country’s four top crypto exchanges: Upbit, Bithumb, Coinone, and Korbit. All other exchanges continue to use their corporate accounts which the regulator says are prone to money laundering.

“We have to convince the banks,” Choi asserted, recognizing that currently “commercial banks do not give real-name accounts to some virtual currency exchanges.”

What do you think the Korean government will announce in November? Let us know in the comments section below.


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South Korean Financial Regulator Reaffirms Negative Stance on ICOs and Crypto

The chairman of Korea’s Financial Services Commission Choi Jong-koo has reaffirmed his negative position on digital currencies and Initial Coin Offerings (ICOs), Business Korea reported Oct. 11. Choi spoke at a parliamentary audit session of the commission held at the National Assembly.

South Korea prohibited ICOs in September last year, stating that such a type of fundraising is “almost a gamble.” This August, Korean lawmakers, including participants from government ministries, returned to the cryptocurrency issue, focusing on repealing the country’s ICO ban. Lawmakers agreed on the need to develop a related policy before carrying a resolution on ICO reallowance.

At the recent session, Choi reportedly said that “the government does not deny the potential of the blockchain industry,” while noting that it “should not equate the cryptocurrency trading business with the blockchain industry.” Choi said:

“Many people say the Korean government should allow ICOs, but ICOs bring uncertainty and the damage they can cause is too serious and obvious. For these reasons, many foreign countries ban ICOs or are conservative towards them.”

Choi also addressed criticism of commercial banks that refused service to crypto exchanges, stating that “exchanges should be able to persuade banks to issue bank accounts to them.”

Other officials have said that the South Korean government is “likely” to announce its official position on ICOs in November. The Chief of the Office for Government Policy Coordination Hong Nam-ki said that the government will announce its position once it finalizes its discussion and receives the results of a government survey.

Hong told Korean business publication the Investor that the government launched a survey of blockchain companies to gather their views on the current legal framework.

In September, South Korean cabinet ministers agreed to exclude all sale and brokerage of digital assets based on blockchain technology from venture business classification. The move was reportedly taken in order to “strengthen the cooperation of related institutions” and to protect citizens from the “illegal activities” related to the digital assets business.

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Source: Cointelegraph

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